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How to start an Employment Business (Jinzai haken) and Recruitment Business (Jinzai shokai) in Japan

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Meaning of Jinzai Haken and Jinza Shokai

Difference of Jinzai Hakne and Jinzai shokai Business

Permit from Government of Japan is necessary

Responsible person is Necessary

Experience of Employment administration 

Acting representative person

Valid period of responsible person

Lecture seminar to become responsible person

Director of Haken or Shokai Company

Measure to develop career of dispatched workers of Haken Business

Capital amount of Comapny to obtain license

Office space to obtain license

Filing registration of change of company’s objectives

Enrollment in social insurance

Necessary documents for application 

Necessary cost to obtain License

Renewal of Jinza shokai business license

Necessary cost to obtain Jinzai haken license

Renewal of Haken License

Onsite inspection by government

Documents to be submitted to other authorities

Category of business that you cannot dispatch workers

Shokai Yotei Haken

1 Meaning of Jinzai Haken (Employment Business) and Jinzai Shokai (recruitment Business) of Japan

I will explain how to make an Employment agency ( Jinzai haken gaisha = 人材派遣会社 = じんざいはけんかいしゃ) and Staff agency ( = Recruitment company =Jinzai shokai gaisha = 人材紹介会社 = じんざいしょうかいかいしゃ)  in Japan.

In this page, meaning of each words are as below.

Difference of Jinzai haken and Jinza shokai business.

Assume that your company employs Mr.A and it dispatches (Haken in Japanese language) him to client company.

Your company receive fee from client company monthly and your company pays him monthly salary. In this case your company needs to obtain Jinzai haken license.

On the other hand,

Assumed that your company has found skilled person (She may be IT engineer) and introduce her to client company (Rakuten corporation etc).

Then client company pays introduction fee to your company ( it may be one time payment )

In this case, your company needs to obtain Jinzai Shokai license.

Permit from Japanese government is necessary

In order to operate Employment agency or Recruitment business,  permit of Ministry of Health, Labour and Welfare (Kosei rodo sho = 厚生労働省）is required.

You can start jinzai haken gaisha or shokugyo shokai gaisha without legal entity as far as you can obtain permit from labor bureau.

Responsible person is necessary

In order to obtain permit from Ministry of Health, Labour and Welfare（ Kosei rodo sho = 厚生労働省 ）, you need to prepare a responsible person acting for client. ( = seki ninsha = 責任者 = administrator = a person in charge ).

This person takes in charge of administration of abiding by relevant laws.

When you plan to make Employment agency ( Jinzai haken gaisha = 人材派遣会社 ) or Staff agency ( Jinzai shokai gaisha = 人材紹介会社 ) in Japan, firstly you need to make reservation of lecture class to become a responsible person of  Employment agency ( Jinzai haken gaisha = 人材派遣会社 ) or Staff agency ( Jinzai shokai gaisha = 人材紹介会社 ).

In order to make Employment agency ( Jinzai haken kaisha = 人材派遣会社 ), responsible person called  ” Haken moto sekininsha “　is required.

In order to make Staff agency ( Jinzai shokai kaisha = 人材紹介会社 = shokugyo shokai kaisha = 職業紹介会社 ), responsible person called  ” shokugyo shokai sekininsha” is required.

You need to appoint at least one shokugyo shokai sekininsha for every 50 workers who manage your business.

You need to appoint at least one Haken moto sekininsha ( a person in charge of worker dispatching business )  for every 100 dispatched workers.

However, even if the number of employees is less than 50, you need to appoint at least one responsible person called ” shokugyo shokai sekininsha “.

In order to assume as responsible person in Jinzai haken gaisha, you need to have experience of employment administration of three years or more.

In the case of Staff Agency, experience of employment administration is not required.

As for ” Experience of employment administration “(As for Haken Business)

Experience of employment administration means that you need to have experience to be administrative executive in a company for more than 3 years.

If you are in position of chief of department etc, supervisor, manager, boss,  you have subordinate staff.

Then you have administered your subordinate staffs.

If you have such experience of more than 3 years, you can satisfy with this requirements to become responsible person in Jinzai haken kaisha ( じんざいはけんかいしゃ ).

In order to assume as responsible person in Jinzai shokai gaisha ( じんざいしょうかいかいしゃ ), you need to have experience of work of  three years or more.

In the case you have been a rank and file employee in a company, if you have taken a seminar, you can become a responsible person of Jinzai shokai gaisha.

You can assume as Representative director and responsible person at the same time.

Your company can not appoint auditor ( Kansa yaku = 監査役 ) as responsible person.

If you become a director ( torishimariyaku ) of your company, but does not become responsible person of Haken business, you do not need to have a experience of administrative executive ( kanrishoku ).

Responsible person should be full time worker.

So, while  you are working in other company, you can not become responsible person.
(Either of Haken and Shokai business)

In the case you are currently working in other company and your spouse is housewife in Japan.

If your wife does not have necessary experience to become responsible person, she can not become responsible person.

So, you need to take a seminar to become a responsible person.

At the timing of application for permit of employment agency business and staff agency, you can work in other company.

However, when your company has obtained permit and started operation of your jinzai haken gaisha or Jinza shoukai kaisha,  you can not work in other company.

Once you apply for permit of labor bureau, it will take 2 or 3 months to get this permit.  You can work within this 2 or 3 months in other company.

ex. Assumed that you apply for license on 15th November 2020, you can acquire it on 1st February 2021.

Assumed that you apply for license on 10th December 2020, you can acquire it on 1st March 2021.

(in the case you are self employee and you can engage in employment agency or recruitment agency and your current job at the same time, you can become responsible person without closing your current job).

In the case you become a Responsible person, you need to live in the area where you can go to your office within several hours.

Because if there is a trouble in your business, you need to come to your office to handle it.

Acting representative person ( shokumu daiko sha = 職務代行者)

In order to form Jinzai haken gaisha ( Not, Jinzai shoukai kaisha ), you need to appoint acting representative person ( shokumu daiko sha = 職務代行者 ).

In the case responsible person of Jinza haken business ( haken moto sekininsha ) is absent from office, the person needs to be tentative responsible person.

So, you cannot form jinzai haken gaisha by one person.

In the case of Jinzai shokai business, Acting Representative person is not required. So one person is sufficient to start it.

In order to become a acting representative person ( shokumu daiko sha = 職務代行者 ),  experience of administrative executive is not required.

A person who wants to become an acting representative person does not need to take seminar.

Valid period of responsible person of Worker dispatching Business (Jinzai Haken) and Recruitment business (Jinzai Shokai) licenses

In order to obtain Jinzai Haken business license or Jinzai Shokai Business license, you need to prepare responsible person.

In order to become responsible person, you need to take seminar.

When you have taken the seminar, you can receive license certificate to become responsible person.

Once you become a responsible person of Jinzai haken business, you can use the license certificate for 3 years.

Once you become a responsible person of Jinzai Shokai (Recruitment business), you can use the license certificate for 5 years.

Lecture seminar to become responsible person of Jinza Haken or Jinzai Shokai Company in Japan

These lessons are conducted by related association of Ministry of Health, Labour and Welfare ( kousei roudou shou ministry).

You can take both lesson even if you are working in employment agency.

You can take this lesson before you make a company to make employment agency or staff agency in Japan.

Everyone can take this lesson. However there is a test at the end of lecture. So Japanese language skill will be necessary to some extent.

Lesson to become a responsible person named “Haken moto sekininsha”, “shokugyo shokai sekininsha”

In Tokyo, lessons are conducted 2 or 3 times per a month.

In other area, lessons are conducted once for every 2 or 3 months.

It will take seven hour to finish a lesson and it will cost 10,000 yen for each lesson.

( If you order me, I will make reservation on your behalf. )

Director of company of Jinzai Haken or Jinzai Shokai business operator

In the case a director of company is resident of Japan, he needs to have necessary status of residence in Japan.

So, if status of resident of a director is dependent, this company can not obtain this Jinzai shokai license.

In the case director of company is NOT resident of Japan, it is still possible to obtain this license.

Measure to develop career of dispatched workers of Haken Business

According to amendment of act on worker dispatching business, when you apply for permission or renewal of license to operate labor dispatching business, you need to conduct necessary measure to develop career of dispatched workers.

You need to appoint a person who is in charge of “career consulting” ( hereinafter this person is called “career consultant” ).

And career consultant engages in consulting with dispatched workers about development of skill or work experience of dispatched workers.

In order to become “career consultant”, you need to take a lesson of “shokugyo noryoku kaihatsu suishinsha = 職業能力開発推進者” = human resources development promter.

Or you need to have experience of human resources department for more than 3 years.

If you can not find a suitable person to become career consulting, you can hire a person outside your company.

And you need to prepare manual related to human resources development.

Capital amount to make Employment agency ( Jinzai haken gaisha ) and Staff agency ( Jinzai shokai gaisha ) in Japan

In order to form Employment agency ( Jinzai haken gaisha = 人材派遣会社 ), the amount of stated capital amount should be at least 20 million yen.

The amount of net asset should be at least　20 million yen.

And your company should keep 15 million yen by cash.

The amount of net asset should be  more than the amount of debt ÷ 7.

If the amount of debt of your company is 210,000,000 yen, the amount of net asset should be more than 30,000,000 yen.

( 210,000,000 yen  ÷ 7 = 30,000,000 yen )

So, you cannot form employment agency by loan.

But, if you ( By individual ) borrow money from bank and you contribute the money to your company, it is not debt of your company, but it is capital.

So, your company can satisfy this requirement.,

However when you try to borrow money from bank to make employment agency, bank will demand you to obtain permit to manage jinzai haken company at the timing of application of loan.

You want to borrow money from bank to obtain Jinzai haken license though, bank demand for permit before you borrow money.

So, I think you cannot use their service.

In the case, you have two offices to operate your business, the amount should be at least 40 million yen.
( 20 million yen × 2 =  40 million yen )

In the case, you operate Employment agency ( Jinzai haken gaisha = 人材派遣会社 ) and Staff agency ( Jinzai shokai gaisha = 人材紹介会社 ) at same office, the amount should be at least 20 million yen.

You need to prepare asset of 20 million yen.

Because, your company needs to sustain enough fund to pay salary to dispatched workers.

In order to form Staff agency ( Jinzai shokai gaisha = 人材紹介会社 ) , the amount of stated capital amount ( shihon kin = 資本金. This amount is registered in commercial register.  ) should be at least  5 million yen.
The amount of net asset should be at least 5 million yen.
(At the time of extension of shokai license, 3.5 million yen is necessary)

In order to set up Jinzai shokai gaisha, you need to prepare at least 1.5 million yen by cash.

In the case the number of your office is two, 1.5 million yen + 600,000 yen is required.

You can establish jinzai shokai gaisha with smaller amount.

Because, workers can receive salary from your client = dispatch destination company ( haken saki gaisha  ).

Office space to operate labor dispatching business and Headhunting business

In the case of worker dispatch undertaking ( jinzai haken kaisha ), the room area should be more than 20 ㎡.

If your office is located in crowded area with adult entertainment business, you can not obtain permit.

In the case, you want to start your worker dispatch company in your residence and your residence is rental apartment, the lease contract should indicate that you can use your residence as office.

And the room for your business should be completely independent from your residence.

It is necessary that your candidates and Client company can go to office space without passing through living room, kitchen etc.

And If you own residential apartment and aim to obtain this license, you need to obtain permit from apartment association.

If your wife own the apartment and you apply for this license, you and your wife need to conclude lease contract.  .

You need to put signboard outside of your unit (on your door) that clarifies your business. Otherwise, candidates and client company can not know if you are operating business there.

In the case of staff agency ( Jinzai shokai gaisha ), room area of 20 ㎡ is not necessary as far as you can prepare meeting room, seat for responsible person.

Location of office does not need to coincide with location of head office of your company.

So, you can determine your residence as head office of your company and rent other office as workplace.

Filing registration of change of Company business purpose

When you set up a company to operate employment agency ( = worker dispatch company = jinzai haken gaisha ), you need to include ” operation of worker dispatch business =労働者派遣事業 ” in the purpose of your company.

You need to inscribe it in the articles of incorporation.

Participation in social insurance

In the case  there is a worker in your company at the timing of incorporation, you need to join employment insurance ( Koyo hoken ) and Compensation Insurance (  rosai hoken ).

So, you need to file these insurance before you apply for worker dispatch undertaking ( Jinzai haken gaisha ) and staff agency ( Jinzai shokai gaisha ) in Japan.

You need to join social insurance  = shakai hoken = 社会保険 ( Including employee’s health insurance = Kenko hoken, employee’s  pension = Kosei nenkin ) even if there is not worker other than representative director.

So, you need to join social insurance before you apply for worker dispatch undertaking and staff agency undertaking in Japan.

Necessary documents to obtain labor dispatching license

There are many necessary documents. And it should be written in Japanese language.

However, I am willing to provide necessary documents for you.

So, when you need any assists to obtain these license, you can contact me.

akiyama(a)japan-law-tax.com    Lawyer To mo hi ko A KI YA MA

Necessary documents to apply for employment agency permit = worker dispatch undertaking ( Jinzai haken jigyo ).

1  Application form for permit of worker dispatching  undertakings.

2  Business plan (  Jigyo keikakusho  ) of worker dispatch undertaking.

3  Articles of incorporation.

4   Certified copy of commercial register ( Tohon )

5   Certificate of director’s domicile. ( Jumin hyo )
( It should indicate Honseki address. )

６   Resume, CV of directors.
(  Picture is not necessary. )

７  Lease contract of office.
etc….

( In the case you rent office to operate worker dispatch business.

In the lease contract it should be clarified that you use this office for worker dispatching business.

If you are subtenant, you need to prepare lease contract between owner of real estate and tenant. And lease contract between tenant and subtenant. )

(In the case you own the office, certified copy of real estate register is required. ).

etc…. 
８  Drawing map of office.
( You need to specify the location of desk etc, room area )

９  Certificate of domicile of responsible person. ( It should indicate Honseki address. )

１０    Resume ( Rireki sho )of responsible person.( You need to specify history of employment administration. Picture is not necessary. )

１１　Rule to administer personal information.

12  Employment contract ( koyou keiyaku sho ) with dispatched worker or rules of employment (  shuu gyou kisoku ).  In this paper, you need to clarify that when dispatched worker takes a training, your need to consider the time as working hour and pay suitable salary.

And there are some matters to be clarified in this documents.

So, you need to prepare rules of employment ( shugyo kisoku = 就業規則 ).

13  Roster of all employees ( Including dispatched workers )14  Self check sheet ( 自己チェックシート ).In this paper, you need to clarify that you have understood law and regulations related to worker dispatching business.
For example. ” Do you obey law and regulations related to worker dispatching business   Yes    No “. Then you can select Yes.
This is sample of self check sheet. 

14  Document your company has system related to development of career

Necessary documents to obtain labor dispatching license and Recruitment business License

As for 1 ( Application form for permit of staff agency undertakings ).

As for 2 ( Business plan (  Jigyo keikakusho  ) of staff agency undertakings )

If you set up plural offices, you need to prepare business plan for each offices.

As for 3 ( Todokede sei tesuu ryo todokedesho　（　届出制手数料届出書　）.

If you do not submit this paper, you can not charge more than statutory amount of fee.

As for 4 ( Report that specifies  category of business and area that  your company handles. )

If you do not submit this format, your company can not reject application from job seeker and job offerer.

(Report that specifies category of business and area that  your company handles.
If your company is located in Tokyo, you want to handle with job offerer and job seeker they are located in Tokyo.
If you do not submit this paper, you cannot reject application from a job offerer and job seeker who is outside of Tokyo.
And if you do not submit this paper, your company need to accept all type of clients and job seeker. )

As for 5 ( Articles of incorporation and Certified copy of commercial register ( Tohon ) ).

If there is a change in articles of incorporation, minutes of general meeting of shareholders that determined the change is required.
In the purpose of company, “staff agency” should be indicated.

As for 7,   ( Resume, CV of directors and auditors ).

Picture is not necessary.

Signature or seal by directors and auditors are required.

Name and birth date, address, latest school background, business experience, matters relating to reward and punishment.

You can not make blank period.

You need to fill in ” job hunting, housewife, preparation for establishment of company etc. “

As for 8.

It should indicate Honseki address. It should not include ” Mai number ” This is a kind of social security number in Japan.

As for 9 ( Resume ( Rireki sho ) of responsible person )

Please refer to No, 7.

In the case of Haken moto sekininsha (responsible person), you need to clarify that you have experience of employment management ( koyo kanri ) for 3 years or more.

For example

【　2000, January, 1st.  chief of sales department ( the number of staff : 2 )

2010, January, 1st.  chief of personnel department ( the number of staff : 2 ) 】

As for 10. (  Latest Balanced sheet of your company, profit and loss statement, Statement of Changes in Net Assets (= kabunushi shihon tou hendou keisan sho = 株主資本等変動計算書 ).

If  your company is still new and have not finished any fiscal year, you only need to prepare only balanced sheet at the timing of incorporation.

This document should indicate that your company has net asset of more than 5 million yen.
Among 5 million yen, your company has to have at least 1.5 million yen by cash.

As for 12 ( Lease contract of office  ).

You need to prepare scanned copy of all pages.

( In the case you rent office to operate staff agency. In the case you own the office, certified copy of real estate register ).

As for 15 ( Rule relating to management of your undertaking. )

As for 16. ( Certificate that can prove responsible person has taken seminar. )
You need to take lesson within 5 years prior to making application for permit.
Responsible person should have business experience of 3 years or more.

As for 18. (  You need to specify the location of desk etc, room area )

You need to specify the location of desk etc, room area etc.
You need to take necessary measures to protect privacy of clients and job seekers.

As for 19. ( Notification paper that your company handles job seeker fairly )

Even after you have started your jinzai shokai kaisha, you need to submit this paper every June.

Necessary cost to obtain Recruitment business license

When you have prepared necessary documents, you can submit it to labor bureau　（ Rodo kyoku ）.

At the timing of application for permit of Jinzai shokai, you need to pay following money.

Fee for Government 50,000 + registration tax 90,000  = 140,000 yen.
( You need to take scanned copy of payment slip of registration tax.  )

Renewal of Jinza shokai business license

When you renew license of Jinzai shokai business, you need to submit following documents.

１　Application form of renewal of permit.

２    Business plan.

３　Financial statement that proves necessary net asset.

４   Copy of final tax return of corporate tax.

５    Certificate that can prove responsible person has taken seminar.
When you renew the permit of Jinza shokai, you need to pay 18,000 yen for each office.

When　you renew the permit of Jinzai shokai business, you need to apply for renewal in 3 months prior to end of valid period.

Necessary cost to obtain Jinza haken license

When you have prepared necessary documents, you can submit it to labor bureau　（ Rodo kyoku ）.

At the timing of application for permit of Jinzai haken, you need to pay following money.

Fee for Government 120,000 + registration tax 90,000  = 210,000 yen.

When the number of office is two, you need to pay 210,000 yen + 55,000 = 265,000 yen.

Renewal of Jinzai haken license

The valid period of permit of Jinzai haken is 3 years.
So, 3 years later, you need to renew the permit again.

When last date of your permit of jinzai haken is approaching, you need to submit necessary documents for renewal 3 months prior to last date of permit.

When you apply for renewal of permit, you need to pay 55,000 yen for labor bureau for each office.

Then, when you have renewed permit, valid period of permit is 5 years.

Onsite Inspection by Government

After you have submitted necessary documents to labor bureau, officer of labor bureau inspect the documents submitted.
Then, they will come to your office to inspect your office on the site.
If your application is granted by labor bureau and receive permit, you can start your business.
It will take 2 or 3 months from submission to permit.

In the case of Jinzai haken gaisha, you need to submit report that can indicate situation of your undertaking by every end of June.

And you need to submit report that indicates financial statement to labor bureau within three month from the last date of each fiscal year.
(  http://tokyo-roudoukyoku.jsite.mhlw.go.jp/hourei_seido_tetsuzuki/roudousha_haken.html
In this page, you can know the content of necessary documents to be submitted.  If you order me, I make necessary documents in this process, too.)

Operator of jinzai shokai business needs to submit report that indicates the situation of his business by every April 30th. This report should indicate the situation of his business during April 1st of previous year to next March 31st.

In these reports, your company needs to indicate the asset of your company.
When you form jinzai haken gaisha or jinzai shokai gaisha, you have prepared enough asset to obtain permit from labor bureau.

And even after you have obtained necessary permit, your company still needs to sustain necessary asset every year.

Some persons may try to borrow necessary money and obtain permit of Jinzai haken gaisha or Jinzai shokai gaisha.
And once they have obtained permit, they are going to return the money to their friend.
But, as I mentioned above, you cannot adopt such scheme.

When you have incorporated a joint stock company, you need to submit following documents to relevant authority.

Category of business that you cannot dispatch workers

Even if you have worker dispatching company ( Jinzai haken gaisha ) in Japan, your company cannot dispatch workers in these categories.

１　Port transport industry ( kouwan unso gyo ).

２　Construction industry　（ kensetsu gyo ）.

３　Security industry ( Keibi gyo )

４　Medical treatment at hospital.（ Iryo gyomu ）
( Excluding the case that is conducted in social welfare facility and shokai yotei haken. )

5    Ｌａｙｗｅｒ， judicial scrivener, CPA, tax account etc.

In the case your company dispatch worker for overseas, you need  to report it to labor bureau each time.

😈 Category of business that you cannot introduce a worker.

In the case your company is staff agency ( Jinza shokai gaisha ), you cannot introduce a worker to the company to following business category.

If your company has changed address of office, trade name, address or / and name of director, responsible person etc, you need to notify to labor bureau within 10 days.

Introduction of shokai yotei haken = 紹介予定派遣

In the case a client company Named Toyoda corporation is looking for new employee.
However, before Toyoda corporation hires a person, they want to inspect ability of a candidate.
Toyoda corporation has  intention to hire her if her ability is suitable for Toyoda corporation.

In this case worker dispatching company ( Jinzai haken kaisha ) can dispatch a specif person to Toyoda corporation .

This dispatched worker has intention to work in the Toyoda corporation if she think Toyoda corporation is suitable for her.

This category of worker dispatching business is called ” shokai (= introduction ) yotei ( = intention ) haken (  dispatching) “.

In the case of shokai yotei haken, dispatching period has meaning of probation period.

And when Toyoda corporation has decided to hire her, the worker dispatching company can receive fee as Jinzai shokai ( Introduction fee ).

In the case of shokai yotei haken, the longest period is 6 months.

( The period of the employment placement dispatching shall be up to 6 months )

In the case of shokai yotei haken, Toyoda corporation can demand her a resume and job interview.
( In the case of other worker dispatching contract, Toyoda corporation can not demand it as far as dispatched worker hopes.  )。

In order to operate shokai yotei haken, your company needs to obtain permit of jinzai haken undertakings and jinzai shokai undertakings.

You need to distinguish Jinzai haken undertakings and Jinzai shokai undertakings clearly.

In the case a person named Hanako applies for registration as dispatched worker, your company cannot treat Hanako as worker of Jinzai  shokai undertakings.

If you become a responsible person of jinzai haken gaisha, you can become a responsible person of Jinzai shokai gaisha at the same time.

In order to register and hire a person as worker of Shokai yotei haken, her permit is required.
( Without her permit, you can not transfer her status from worker of Jinzai haken gaisha to Jinzai shokai gaisha.  Without her permit, you cannot register her as worker of Jinzai haken gaisha and Jinzai shokai gaisha at the same time).

You cannot introduce a dispatch destination company to a worker who is registered as worker of Jinzai haken gaisha.

You cannot introduce a dispatch destination company to a worker who is registered as worker of Jinzai haken gaisha.

You need to administer personal information of workers of Jinzai haken gaisha and Jinzai shokai gaisha separately.

Your company can  not introduce a worker to the company who is looking for only dispatched worker.

Your company can  not dispatch a worker to the company who is looking for introduction of worker.

In the case period of worker dispatch contract is finished and Toyoda corporation has decided not to hire her, if dispatched worker demands, Toyoda corporation needs to clarify reason that they do not hire her as worker.

In the case of shokai yotei haken, Toyoda corporation cannot set up probational period after period of dispatch contract.

In the case you operate Jinzai haken gaisha, you cannot receive any fee from dispatched worker.
( For example, registration fee. )

As for margin percentage

In year of 2010, worker dispatching law ( Jinzai haken law ) was amended that worker dispatching compnay ( Jinzai haken kaisha ) is required to announce their margin percentage.

According to this amendment, your company needs to announce matters below ( As for each office ).

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