Swiss recruitment and placement licence (Vermittlung)

What activity needs a licence under the AVG?

The AVG catches two distinct businesses, and a recruitment company often does both. The first is placement (Arbeitsvermittlung): the agency introduces a worker to an employer so the two of them sign an employment contract with each other. The agency takes a fee for the match and steps back; it never becomes the employer. The second is staff leasing (Personalverleih): the agency employs the worker itself and hires that worker out to a client company, which directs the day-to-day work. The worker holds a contract with the agency while taking instructions from the client.

Both need a licence. The distinction matters because leasing carries weight that placement does not. A leasing agency owes wages to people it has hired out, so the Act protects those workers with a security deposit and a mandatory written hiring-out contract for every assignment. A pure placement agency holds no such employment exposure and so carries no deposit. Many firms apply for both permissions at once, because a single client relationship can shift from one to the other as a project changes shape.

The licence is an activity permit, not a company type. It is held by whatever legal entity runs the business, usually an AG or a GmbH, and it presupposes that the entity already exists and is registered. The company comes first; the licence sits on top of it.

Who grants the licence: canton or SECO?

The cantonal labour office grants the ordinary licence, and SECO grants a second federal licence for cross-border work. This two-tier split is the part foreign founders most often get wrong, because they assume a federal authority must be the single gatekeeper. It is the other way round. For a recruitment business operating inside Switzerland, the competent authority is the labour office of the canton where the business has its registered office. A Zurich-seated agency applies in Zurich; a Zug-seated agency applies in Zug.

SECO enters only when the activity reaches across the border. Placing a worker to an employer abroad, sourcing a worker from abroad for a Swiss employer, or hiring out a leased worker to a client company abroad each requires a federal licence from SECO in addition to the cantonal one. The federal licence does not replace the cantonal permit; the agency holds both, and the cantonal authority remains its day-to-day supervisor. One direction is closed off entirely. Hiring out workers from a foreign base into Switzerland is not permitted under the AVG, even with a licence.

What conditions does the licence carry?

The AVG sets four standing conditions, and an applicant has to satisfy every one of them before the labour office will grant the permit. They are standing conditions of the licence rather than a one-off application hurdle, so a change in any of them is reportable to the authority.

• Commercial-register entry. The business must be entered in the Swiss commercial register. A foreign company cannot hold the licence directly; it needs a Swiss entity, and that entry is the first thing the authority checks. How the register works and what an extract shows is set out in our guide to the Swiss commercial register.
• Suitable business premises. The agency must run from dedicated, appropriate premises. A residential address used for an unrelated purpose, or a pure mailbox, does not meet the test. The premises are part of what the authority assesses, because the business handles the personal and employment data of jobseekers.
• A qualified responsible person of good standing. A named individual must direct the business, be of good standing, and be resident in Switzerland or hold a settlement permit. That person must not pursue any side activity that could compromise the interests of the jobseekers or the client companies. This is the condition that most often decides the timetable.
• A security deposit, for staff leasing. A leasing agency must lodge a deposit before the licence is issued, as a bank or insurance guarantee, deposit insurance, savings bonds or cash. It secures the leased workers' wage claims if the agency becomes insolvent. Placement without leasing carries no deposit.

The good-standing requirement reaches the people behind the company as well as the named responsible person. An applicant whose principals have a record that bears on the trustworthy handling of workers and their data can expect the authority to probe it. The Act is built to protect the jobseeker, who is the weaker party in the arrangement, and the conditions read that way throughout.

How large is the security deposit?

The staff-leasing security deposit is fixed by the Federal Council in Art. 6 of the fee ordinance (GebV-AVG, SR 823.113); the authority has no discretion over the amount. It is CHF 50,000 per licensed office, CHF 100,000 once the agency has leased more than 60,000 working hours in the previous calendar year, and a further CHF 50,000 for an agency that also leases abroad. One office therefore lodges CHF 50,000, CHF 100,000 or CHF 150,000. A new agency starts at the base amount and tops up after its first year above 60,000 hours. A head office that itself holds a leasing licence can lodge the maximum deposit of CHF 1,000,000 and so release its branches from separate deposits; otherwise each licensed office lodges its own.

The deposit is not a fee and is not consumed by the state. It is held as security for the wage claims of the workers the agency hires out, and it is released at the earliest one year after the licence is withdrawn or cancelled, staying blocked for as long as wage claims are pending. The licence is issued only once the deposit is lodged, so it sits on the critical path of any leasing application. SECO sets out the regime in its guidance on private placement and staff leasing.

What the AVG licence does not do

The licence authorises the activity; it does not vouch for the agency's conduct or substitute for the rest of Swiss employment law. Four limits are worth stating plainly, because each one catches a foreign operator who treats the permit as a complete clearance to trade.

It does not displace the staff-leasing contract rules. A leasing agency still owes every leased worker a written contract and the protections of the hiring-out provisions, and the licence does not waive a single one of them. It does not cover work that crosses the border on its own. A domestic cantonal licence is not enough the moment a placement reaches abroad; the federal SECO licence is a separate grant, and operating cross-border on a cantonal permit alone is unlawful. It does not legalise hiring out into Switzerland from a foreign seat, which the Act prohibits outright regardless of any licence held elsewhere. And it is not a posted-workers clearance: a foreign company sending its own employees to perform a contract in Switzerland is governed by the posted-workers rules and the wage-protection regime, which are a different matter from running a placement or leasing business under the AVG.

In the matters we run, the part that bites is usually the responsible-person condition rather than the deposit. A founder can wire the security in a day. Finding, or qualifying, an individual who is resident, of good standing, genuinely directs the business, and carries no conflicting side activity is what tends to set the real timetable on a Swiss licence of this kind.

How does the AVG licence fit a company setup?

The licence is a second step that follows incorporation, and sequencing the two correctly saves a wasted month. The Swiss entity has to exist and be registered before the labour office will look at the application, because the commercial-register entry is itself a condition. A founder building a recruitment business from abroad therefore forms the AG or GmbH first, settles the registered office and the resident signatory, and only then files for the placement or staff-leasing licence on top of the finished company. Our guide to Swiss company formation covers the incorporation that has to come first, and the resident-director requirement overlaps directly with the licence's demand for a qualified person inside Switzerland.

The cross-border element is the other early decision. An agency that knows from the outset it will place or lease across the border plans for the federal SECO licence and, for leasing, the additional CHF 50,000 deposit, rather than discovering both after the cantonal permit is in hand. Where the activity also touches client money or candidate payments held on account, the anti-money-laundering position is worth checking early too, and the wider set of regulated-activity permits sits in our SECO and special permits guides. Most recruitment businesses stay clear of that line, but it is cheaper to confirm than to unwind.