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Licenses for Swiss Recruitment Companies
Licenses are required for intermediaries who carry out professional hiring activities in the form of temporary work or work on contract within Switzerland or between Switzerland and other countries.
Table of Contents:
Conclusion
- Who is an intermediary?
- What does professional hiring mean?
- Professional hiring within Switzerland or between Switzerland and other countries
- Conditions for license obtaining
- Does the branch need a separate license?
- What is the duration of the license?
- Sanctions for hiring of services on a professional basis without a license
Conclusion
Who is an intermediary?
An intermediary is anyone who:
Has contacts with jobseekers and with employers and puts both parties in touch with each other after a selection procedure has been carried out
Has contacts with jobseekers and with employers and puts both parties in touch with each other by providing address lists to the other party
Has contacts only with jobseekers and, after conducting a selection procedure, provides them with addresses of employers that he/she has obtained without contacts with them
Publishes addresses of jobseekers or employers for sale in particular publication organs which are not connected with a main journalistic section
Recruits jobseekers and brings them into contact with an intermediary or brings jobseekers referred to him/her into contact with employers
What does professional hiring mean?
The hiring of services on a professional basis means the habitual, profit-oriented hiring of services. The hiring of services is habitual provided that ten or more hire contracts are concluded in twelve months with an individual worker or group of workers.
Any agreement relating to an assignment is considered to be a contract. The hiring of services is assumed to be profit-oriented if the hirer is obliged to pay more than the direct wage costs plus incidental wage costs plus a share of administrative costs not exceeding 5%. The hiring of services is also deemed to be professional if it generates a turnover above CHF 100,000.
Any agreement relating to an assignment is considered to be a contract. The hiring of services is assumed to be profit-oriented if the hirer is obliged to pay more than the direct wage costs plus incidental wage costs plus a share of administrative costs not exceeding 5%. The hiring of services is also deemed to be professional if it generates a turnover above CHF 100,000.
Professional hiring within Switzerland or between Switzerland and other countries
The following four cases are considered as hiring abroad:
-
Switzerland-abroad:
A job-seeking person who is in Switzerland and is placed abroad. -
Abroad-abroad:
A job-seeking person who is abroad is placed in a job abroad. -
Switzerland-Switzerland:
A job-seeking foreign person who is already in Switzerland and is not yet entitled to gainful employment is placed (tourists, pupils, students, asylum seekers). This category also includes the placement of persons who are already in Switzerland and in possession of a short-term residence permit that authorizes them for a specific job, but who are now to be placed for a new job. -
Abroad-Switzerland:
A job-seeker who is staying abroad is placed in Switzerland. This also includes the placement of a cross-border commuter who is to take up employment in Switzerland for the first time. -
Swiss Financial Sandbox Initiative
The complexities of employment across borders echo the broader trend in financial regulation, including frameworks like the Swiss Financial Sandbox Initiative, which allows for testing new financial services in a controlled environment.
Intermediaries carrying out professional recruitment activities in Switzerland or between Switzerland and abroad require different types of licenses:
- -1-
Cantonal License
To carry out professional recruitment activities only within Switzerland is required a license only from the cantonal licensing authority. - -2-
SECO License
To carry out professional recruitment activities between Switzerland and abroad, a license from the cantonal recruitment authority and a federal license in addition.
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Application for a license should be submitted in writing to the competent cantonal licensing authority, which can provide the forms required.
An application for a federal license can be lodged with the same authority at the same time.
An application for a federal license can be lodged with the same authority at the same time.
Just as with other regulated financial structures such as a Swiss Holding Company, authorities require a high standard of personal reputation and professional qualification from those seeking intermediary licenses.
To secure a license, the business and the person responsible for its management must satisfy certain conditions:
To secure a license, the business and the person responsible for its management must satisfy certain conditions:
Person who is responsible for management must:
- be a Swiss citizen or a foreigner with a residence permit
- be qualified to offer services for hire on a professional basis
- be of good reputation (having no previous convictions, no recovery proceedings against them, no bankruptcies, no outstanding tax liabilities, etc.)
- have the necessary professional skills:
b) several years of professional experience in placement, hiring services, personnel, organization or business consultancy, or in the personnel management field.
Does the branch need a separate license?
Branches always require a separate license. If they are in a different canton to the main office, they must obtain the license before commencing business. If they are in the same canton as the main office, they may commence before the license has been issued as long as they are registered with the licensing authority. This applies regardless of the business type — whether it’s an employment agency or a corporate entity managing assets such as those under Share Capital Taxation in Switzerland.
What is the duration of the license?
The license, which is not limited in duration, is in the name of the business, and the name of the person responsible for management is stipulated as well.
Sanctions for hiring of services on a professional basis without a license
Any person who intentionally acts as an intermediary without the required license shall be liable to a fine of up to CHF 100,000. Employers who intentionally work with intermediaries who they know do not hold the required license shall be punished by a fine of up to 40,000 francs. Such violations are taken as seriously as regulatory breaches in other sectors, including non-compliance with the Travel Rule for Virtual Assets.
Conclusion
In Switzerland, licenses are mandatory for intermediaries involved in professional hiring activities, whether within the country or internationally. Professional hiring involves specific criteria, and licenses are granted based on certain business and personal qualifications. Branches require separate licenses, and non-compliance with licensing regulations can lead to substantial fines. Switzerland has clear regulations governing professional hiring activities and the licensing requirements for intermediaries to ensure fair and lawful recruitment practices within the country and in cross-border placements. To complement hiring and employment practices, companies often need to manage related operations such as opening corporate accounts. For more, refer to our guide on how to Open a Swiss Bank Account.
Sources:
Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.
- https://www.fedlex.admin.ch/eli/cc/1991/408_408_408/de
- https://awa.tg.ch/public/upload/assets/35132/merkblatt_pv.pdf?fp=1
Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.