Business Management
David Merz | Founding Partner
Zurich, August 20, 2024
More than 6,000 companies in Switzerland are active in the private employment agency and staff leasing sector. Setting up a recruitment agency requires proper preparation and planning, as the profession is regulated by the authorities. You need the appropriate professional qualifications and must comply with the requirements of the employment offices and SECO.
In the following article, we explain the specific requirements for setting up a recruitment agency in Switzerland, the registration obligations and the costs you will incur.
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In Switzerland, employment agencies and recruitment agencies require a license and must comply with both federal and cantonal regulations. They also have various reporting obligations to certain authorities to ensure proper and legally compliant operations.
An employment agency is anyone who brings employers and jobseekers together to conclude employment contracts.
A staff leasing company is itself an employer that lends employees to other companies. As a rule, this is temporary or interim work.
Before you set up your company, you should familiarize yourself in detail with the legal framework. You need a permit from your cantonal employment office to open a recruitment agency.
If you would like to regularly arrange work to or from abroad, you will need a permit from the State Secretariat for Economic Affairs (SECO) in addition to the cantonal operating license.
The placement of a foreigner who is resident in Switzerland but not yet authorized to work is also considered to be a foreign placement.
If you do not want to set up a traditional agency but would like to place your staff via a job exchange on the Internet, you will also need a permit. The Directorate of Labor writes the following:
“Job placement can also take place via the Internet. An intermediary is a person who, in accordance with Art. 1 let. a and b AVV, has contact with jobseekers and employers and either brings them together following a selection procedure or sends address lists to the other party.
Operators of job portals on the Internet are therefore also employment agencies within the meaning of the Employment Agency Act. They require a license from the cantonal employment office if they offer their services for a fee and on a regular basis.
Permission to place and hire staff within Switzerland is only granted if you meet a number of requirements. This is initially associated with effort, but has the advantage that not just any entrepreneur can set up a recruitment agency and there are clear regulations.
These are the requirements for the operating license:
Before you open your recruitment agency, you must ensure that your company complies with all relevant federal and cantonal regulations. This includes the Employment Agencies Act (AVG) and the associated Ordinance (AVV).
Although there are general requirements at federal level that apply to all cantons, the cantonal employment offices often have additional or specific requirements and regulations. Please check with your cantonal authority in advance.
The persons responsible for the management must be Swiss citizens or foreign nationals with a permanent residence permit, have the appropriate professional qualifications for the placement of personnel and be of good repute. They must prove their qualifications through appropriate training including several years of professional experience.
For foreign placement, sufficient knowledge of the conditions in the respective countries must also be demonstrated. You also need a permit from SECO, more on this in the next section.
Your company must have suitable business premises that meet the requirements of the recruitment agency. These requirements may vary depending on cantonal regulations, but generally include the following points, among others:
The business premises must offer sufficient space to carry out the daily work processes efficiently. The premises must be equipped with the necessary office equipment, such as computers, telephones, office furniture and other materials required for the recruitment agency.
Your company must not operate any other business that could jeopardize the interests of jobseekers or employers. For example, if a recruitment agency also offers consultancy services to employers, this could lead to a conflict of interest if placement decisions are influenced in order to win or extend consultancy contracts.
Carefully prepare all the necessary documents for the permit application. This includes the extract from the commercial register, the rental agreement or proof of ownership of the business premises, proof of the qualifications of the management and, if applicable, the business concept.
The fee for issuing the brokerage or lending permits is CHF 750 – 1,650, depending on the work involved. These fees are charged for both cantonal and SECO permits.
If there are changes to the permit, this will be charged at the expense of the authority and amounts to approx. 220 – 850 CHF. Non-profit institutions that wish to provide personnel can be exempted from the fees.
Staff leasing companies must also pay a deposit of CHF 50,000 to CHF 150,000 (depending on the company’s activities).
If all requirements are met and you have prepared the documents, submit the application including all documents to your competent cantonal employment office. You can find the application forms online on the relevant website.
After receiving the permit, adhere to all the prescribed requirements and inform the employment office of any significant changes in your business that could affect the permit.
The cantonal employment office will also regularly check whether you continue to meet the requirements, which is why you should ensure that your accounts are kept properly and that you comply with the regulations.
In order to place personnel outside Switzerland or foreign personnel within Switzerland, you need a federal permit issued by SECO in addition to the permit from your cantonal employment office. In this way, the State Secretariat for Economic Affairs ensures that the agencies work in a reputable manner and that the rights of employees are protected.
The requirements are the same as those for authorization by the cantonal employment office. The application for a federal permit for international placement is submitted directly to SECO.
Labor law: If you have been granted a permit for personnel placement and leasing, you must comply with labor law provisions accordingly. This applies in particular to compliance with employment contracts, wage payments and working conditions. This also includes compliance with regulations on working hours and protection against dismissal.
Data protection: As a recruitment agency, you process the personal data of applicants and clients. You must therefore comply with the provisions of the Swiss Data Protection Act (DPA). This includes the careful handling of data, ensuring data security and informing data subjects about the processing of their data.
Reporting obligations: Depending on the nature of your activity, there may be further reporting obligations, for example to unemployment insurance (ALV) or other authorities.
Any changes in the information that led to the approval must be reported to your competent employment office and, in the case of foreign placements, also to SECO.
When placing foreign workers, certain reporting obligations must be observed, such as obtaining work permits and reporting to the relevant migration authorities.
Recruitment agencies must keep statistics and reports on their placement activities and make these available to the competent authorities on request.
When placing workers in professions that are subject to special regulations (e.g. in the construction industry), specific reporting obligations must be observed.
In the event of data breaches or breaches of data protection, these must be reported to the Federal Data Protection and Information Commissioner (FDPIC).
Calculate the costs of your company incorporation here.
Setting up a recruitment agency in Switzerland is associated with various costs, which can vary in amount. These are the typical expenses:
Formation costs: When forming a GmbH or AG in Switzerland, the certificate of incorporation must be notarized by a notary. Notary fees vary depending on the canton and are typically between CHF 700 and CHF 2,000. Nexova covers these notary fees and offers company formation for just CHF 490.
Commercial register entry: The company must be entered in the commercial register in order to obtain a license for a recruitment agency. The fees for this amount to around CHF 600 to 700.
Permit: The fee for issuing the brokerage or rental license is CHF 750-1,650, depending on the work involved.
Other costs incurred: These include costs for office rent, office equipment, software and marketing.
Under certain conditions, you can also set up a recruitment agency in Switzerland as a foreigner. Switzerland is very business-friendly and offers good conditions for international founders. However, there are some legal framework conditions that you must observe:
Requirements and restrictions: As an EU/EFTA citizen, you can set up a company in Switzerland relatively easily. Citizens of other countries generally require a residence permit.
Residence and work permits: If you want to live and work in Switzerland, you need a corresponding permit. This will be issued if you can prove that you can run a business and support yourself.
Here you will find further information on how to set up a company in Switzerland as a foreigner.
Setting up a recruitment agency requires a permit, which must be applied for from the cantonal employment office. If you would like to place personnel from abroad in Switzerland or vice versa, you also need a federal permit from SECO. The cost of the permit is between CHF 750 and CHF 1,650.
Staff leasing companies must also leave a deposit with their local employment office, the amount is individual. There are also various reporting obligations to the employment offices. All of this is required in order to provide employees with the best possible protection.
To run a recruitment agency, you need to fulfill numerous requirements. For a passionate HR professional, however, this should not be an obstacle to fulfilling the dream of owning your own company.
Do you need support in setting up your company? Or you are a foreigner and would like to set up a company in Switzerland? No matter what your concerns are – we are here to help you with your start-up issues.
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