As a major location for international trade and finance, as well as an entry point to the mainland China market, Hong Kong businesses, are always in need of high-performing talent. As a result, employment agencies have been popping up in recent years to help job seekers and employers navigate their way through the situation. In 2020, it was reported that 3,148 licensed employment agencies were operating in Hong Kong.
This guide looks at how you can start an 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?
Employment agencies — sometimes known as ‘employment intermediaries’ in other jurisdictions — act as a ‘middleman’ between client companies and employees. While precise services can differ, they generally recruit and place employees, and may even directly provide temporary and contract staff to businesses and organizations.
What are the required steps for starting an employment agency in Hong Kong?
Before starting an employment agency in Hong Kong, you should check that you meet the following basic requirements:
1. Business Registration
An employment agency in Hong Kong can be a limited company, a partnership, a limited partnership, or a sole proprietorship. In every case, the business must first be registered with the Inland Revenue Department before applying for an employment agency licence.
In the case of a Hong Kong limited company, the business must also be incorporated/registered with the Companies Registry.
Note that the type of business structure used in Hong Kong will have an impact on application requirements. For example, in a partnership or sole proprietorship, it is the owner/operator or partner that will apply for the employment agency licence. Whereas in the case of a limited company, it will be directors or officers of the company (more on this below).
2. The ‘Nominated Operator’ requirement
It is a requirement to nominate a real person who will be classified as the ‘agency operator’. It is the nominated operator who has overall regulatory responsibility for the operation of the agency. So-called ‘associates’ of the nominated operator are permitted to operate under the nominated operator’s oversight.
The nominated operator must be either a director or an officer of the company, or both, and must hold Hong Kong citizenship, Permanent Residency, or an otherwise valid visa. It is also a requirement that the nominated operator meet trust and integrity requirements: This means being neither an undischarged bankrupt, nor having a relevant conviction in the previous five year period, nor having previously breached the applicable Code of Practice for Employment Agencies.
3. The Employment Agency Licence application requirements
Any business that aspires to be an employment agency in Hong Kong, must register itself with the Hong Kong Labour Department, and obtain an employment agency licence, or a ‘Certificate of Exemption’.
When submitting an application for an employment agency licence, the applicant must:
- Submit the proposed name to the Employment Agencies Administration for verification
- Submit an application for an employment agency licence
- Submit an authorisation form permitting the Hong Kong Police to look at prior convictions of the applicant
- Attend an interview, with the following documents:
4. Renewal of Licence
A renewal of an employment agency license must be applied for at least two months prior to the license expiry date. As well as up-to-date documentation, a license renewal fee of HK$ 2,000 will apply.
Key obligations of an employment agency in Hong Kong
Once the licence is approved and issued, a Hong Kong employment agency must ensure:
- Full compliance with all laws of Hong Kong, including but not limited to, the Employment Ordinance, the Employment Agency Regulations, 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-seekers. This includes accurately describing the statutory employment rights and obligations in Hong Kong
- Draft service agreements with job-seekers and clients, and issue compliant receipts for any payments received
- Fulfil the licencee’s responsibility to operate the employment agency in an appropriate and compliant manner.
Read more at the Do's and Don'ts for Operating an Employment Agency
Running an employment agency is a regulated industry in Hong Kong, which means following a series of steps to ensure compliance:
- Ensure that the business, whether incorporated or unincorporated, is appropriately registered with the authorities.
- Gather all necessary information to submit an application for an employment agency licence, including details of the ‘nominated operator’
- Submit the employment agency licence application, and attend an interview to determine fitness to operate
- Maintaining ongoing compliance with the applicable Code of Practice and employment laws, once the licence is approved and issued.