Opening a Recruitment Company in Germany
Opening a Recruitment Company in GermanyUpdated on Thursday 09th March 2023
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There are certain specific legal requirements in addition to the company registration ones, when setting up a recruitment company in Germany. These requirements apply depending on the type of company to be registered in Germany. However, an employment agency is not required to register with the Federal Labor Market Authority in Germany in order to start operating.
Temporary employment agencies are required to obtain authorization with the Labor Authority. The authorization for opening an employment agency in Germany is subject to a fee. Also, the authorization is released for the first three years initially and then the German company may apply for an unlimited authorization.
German recruitment companies are required to register with the Chamber of Industry and Commerce. Starting a business in Germany implies following several legal and administrative steps and our team of lawyers can guide through the entire procedure.
Types of recruitment companies in Germany
Foreign businessmen setting up recruitment companies benefit from flexible structures when registering their companies. Together with the usual types of companies that can be registered as recruitment companies, the law also allows German sole traders and partnerships to operate as employment agencies. The only difference between these types of companies resides in the set up costs and taxation in Germany.
The most employed type of company is usually the limited liability company which requires registration with the German Trade Register and with the Accident Prevention and Insurance Association. German recruitment companies may be temporary or permanent.
Apart from assistance with the corporate income tax, we also answer important questions about the other applicable taxes, such as the value-added tax. This is a tax imposed on the sale of goods and the provision of services and almost all resident companies are required to observe the process for VAT registration in Germany. An exemption does however apply to small businesses and our team can give you more details.
Opening a German employment agency
The recruitment market in Germany has increased during the last years. The registration procedure of an employment company is simple and will take about three weeks. Once the company is registered with the Companies Registrar, the authorization procedure will take another six to eight weeks. The following codes in Section K for real estate, renting and business activities in the Nomenclature for Economic Activities are available for recruitment companies in Germany:
- 74.5 for labor recruitment and provision of personnel
- 74.50 for labor recruitment and provision of personnel.
Recruitment companies are subject to the annual reporting and filing requirements, as per the German general accounting practices or the IFRS in some cases. These companies will also be required to keep their books in Germany, this is why our accountants will assist you with complete bookkeeping options for your local business. Contact our German accountants for more information about our services.
For complete information about registering a recruitment company, please contact our law firm in Germany. They can also assist if you need trademark registration services in Germany.