As a major location for international trade and finance, as well as an entry point to the market of Mainland China, businesses in Hong Kong are always in need of high-performing talent. As a result, employment or recruitment agencies have increased in recent years to address the need of both employers and employees to find qualified staff and job opportunities.
According to the Hong Kong Labour Department, as of January 2023, there are currently 3,480 firms with a registered employment agency license capable of providing recruiting services in Hong Kong. Additionally, the Labour Department has a list or a registry of all the registered Hong Kong companies.
In this article, we will take a look at how you can start your employment agency in Hong Kong, including what is required to apply for an employment agency license, and ongoing compliance requirements.
What is an Employment Agency?
The law that regulates employment relationships in Hong Kong is the Employment Ordinance, which stipulates that any person or business that wishes to provide service in a way of facilitating the placement of job opportunities needs to apply for an Employment Agency license. In other words, companies that act as mediators between companies and employees who seek jobs are considered Employment Agencies in Hong Kong by the Labour Department.
Nevertheless, some organizations such as non-profits that engage in activities that are considered to be to the benefit of society may be permitted to apply for a Certificate of Exemption (CoE). The Labour Department will evaluate and determine if all the conditions are met to issue the certificate.
Now that we have covered the basic concepts of what an Employment or Recruitment Agency is and which activities it can carry out, we should move into the application process. More details will be shown in the next section.
What are the previous conditions for applying for an Employment Agency license in Hong Kong?
There are a few previous requirements that need to be completed before even starting to apply for a license. Here we enlist the conditions:
Obtain the Business Registration Certificate
Hong Kong business entities that wish to carry out the activities of an Employment Agency in Hong Kong need to be a Private Limited Company, a Hong Kong Partnership, or a Sole Proprietorship. Additionally, these business entities need to obtain their Business Registration Certificate (BRC) from the Inland Revenue Department before they can apply for the corresponding license. Furthermore, the cases of a Private Limited Company, need to be registered as well as with the Companies Registry (CR) in Hong Kong.
As the above-mentioned business entities have different internal structures and incorporation or registration process, the application process, fees, and times change from one business entity to another, and therefore it should be considered when choosing the one to be set up. For example, in a partnership or a sole proprietorship, as are simpler structures, the owner will be the one in charge of applying for the license. On the other hand, with a Private Limited Company, the directors will be the ones in charge of the process.
Find out how the Legal Entities in Hong Kong work and explore the differences in business entities available in Hong Kong
Having a Nominated Operator
The next step would be to have an individual assume the role of the agency operator or nominated operator. This role will assume all the responsibility that will come from operating the business, in this case, the employment agency. Furthermore, the associates of the nominated operator can engage in the activities permitted under his or her oversight.
Additionally, the nominated operator needs to be a director of the established company and be a Hong Kong permanent resident or have a valid visa for the position. Moreover, the person assigned to the role must have an outstanding record with no previous convictions in five years or have broken the code of practice for Employment Agencies. Also, an individual with an undischarged bankruptcy will not be able to be nominated.
What are the steps of the application for an Employment Agency License application?
Once the previous conditions have been met by the company or the owners, a business that wishes to engage in employment agency activities in Hong Kong, must register with the Hong Kong Labour Department and apply for an Employment Agency License or, if it applies, a Certificate of Exception.
The application process involves the following steps:
- Submitting the individual's name to the Employment Agencies Administration to be verified.
- Apply for the license using an Employment Agency License form.
- Submit an authorization form to permit the Hong Kong police to look at the non-criminal record of the applicant
Once the document submitted has been received, the applicant must attend an interview appointment and provide the following documents:
- Certified True Copies of the Identity Card for the Hong Kong permanent resident applicant of passport for the foreign applicant.
- Have certified true copies of the Business Registration Certification, Articles of Association, and the Certificate of Incorporation.
- A certified true copy of the Annual Return (NAR1).
- A certified true copy of the document confirming the appointment of the operator.
Renewing the License
The employment agency license must be renewed every year as its validity period lasts for one year. Additionally, the renewal process must take place 2 months before the expiration date and if any changes happen in the company structure, the corresponding updated documents must be provided as well for the renewal process. The renewal fee is typically around $2,000 Hong Kong dollars.
Key obligations of an employment agency in Hong Kong
Once the license has been approved and issued, a Hong Kong employment agency must fulfill the following points:
- Full compliance with all laws of Hong Kong, including the Employment Ordinance, the Employment Agency Regulations, the Trade Descriptions Ordinance, the Personal Data (Privacy) Ordinance, the Prevention of Bribery Ordinance, and the Immigration Ordinance.
- Full compliance with the standards set out in the Code of Practice for Employment Agencies.
- Proper, qualified advice to job applicants. This includes accurately describing the statutory employment rights and obligations in Hong Kong.
- Draft service agreements with job applicants and clients, and issue receipts for any payments received.
- Fulfill the licensee’s responsibility to operate in an appropriate and compliant manner.
For more information about this section, the Labour Department has a dedicated section about the Do's and Don'ts of Operating an Employment Agency.
Conclusion
As a regulated industry in Hong Kong, there are several points to consider when running an Employment Agency. For example, marking sure that a company is properly registered with the corresponding authorities with both the Companies Registry and the Inland Revenue Department, if applicable, as well as fulfilling the prerequisites before applying for the employment agency license.
Another important point would be to nominate a person as the company operator that would oversee and will conduct the operations of the company within compliance in Hong Kong.
