Starting A Recruitment Company in Germany

Expanding a recruitment business overseas can be a great strategy for encouraging growth, demonstrating scalability and ultimately increasing the value of your business. Recruiters are quickly recognising that some of the greatest opportunities lie further afield and seeking new markets can help put your business ahead of the competition.

With the largest economy in Europe, Germany has a strong focus on manufacturing, IT, engineering and industries within the metal and electrical sector. Professional and skilled labour is also on the rise, making the recruitment market incredibly diverse.

One of the key distinctions about Germany is that each region tends to focus on one particular sector.

  • Frankfurt for banking.
  • Düsseldorf for fashion, media and communications.
  • Berlin for e-commerce, new media and digital/tech start-ups.
  • Hamburg shipping & logistics.
  • Munich and Stuttgart for the automotive industry.

Why use Open A European Company to assist with setting up a recruitment business in Germany?

Understanding local employment legislation, accounting requirements, language barriers and red-tape can often deter businesses from the outset. At Open A European Company.com our team of professional experts have years of experience and are always available to help guide you through the entire process.

  • We provide expert help and advice in setting up your recruitment business in Germany from start to finish.
  • We will guide you throughout the incorporation process.
  • A unique one-stop solution for all your German company formation requirements that you can’t find anywhere else.
  • We take care of the entire process from start to finish so you can relax knowing our experts will organise everything for you.

Services we provide include:

  • Company formation.
  • Accounting services and payroll.
  • Registering for VAT.
  • Recruitment license applications.
  • Physical & Virtual Offices.
  • Bank introductions.
  • Immigration & visa services.

Requirements for setting up a recruitment business in Germany

The most common type of company used when setting up a recruitment company is a limited liability company, also referred to as a GmbH.  Companies can be temporary or permanent, but you will have to register with the Accident Prevention and Insurance Association.

The requirements for setting up a limited liability company (GmbH) are:

  • A minimum share capital is €25,000.
  • A minimum of one shareholder.
  • A notarized agreement must be drawn up between shareholders.

In addition to the GmbH structure, the law also allows German sole traders and partnerships to operate as recruitment agencies.

What’s required to open your recruitment company in Germany?

In order to commence with the formation procedure, you will need to:

  • Select and check the availability of the company name.
  • Depositing the minimum share capital.
  • Successfully opening a bank account.
  • Draft and submit the necessary documentation.

Trade Registration & VAT

To open a recruitment company in the Netherlands you will need to be registered at the Trade Register and also be registered for VAT. The VAT tax rate in Germany is 19 % (as of 12th May 2016).

Recruitment Licence (Arbeitnehmerüberlassung)

Recruitment companies that supply employees to hirers have a legal requirement to register for a labour leasing licence, commonly referred to as an AUG licence. These licences are administered by the Bundesagentur für Arbeit in Nürnberg, Germany.

In order to submit the application you will need to supply documents in both English and German, including example contracts, confirmation by various UK authorities and documents from the bank.

Failure to acquire an AuG licence can lead to fines by the labour authorities, criminal proceedings and you may be barred from conducting business in the future.

The licence will need to be renewed annually for the first 3 years, after which you can apply for an indefinite license.

The incorporation procedure for a recruitment agency is relatively simple and will take approximately three weeks, with the AuG licence application typically taking between three to four weeks.

Setting up an Agency for Temporary Staff

The temporary employment market has been rapidly increasing in Germany over recent years, particularly among the small and mid-sized businesses that are prevalent throughout the country.

A temporary employment agency will again require authorisation from the Bundesagentur fuer Arbeit, and you will be required  to notify  the commercial register, the tax authorities and the health and social insurance institutions. You must also adhere to a number of legal provisions that protect temporary employees, for example in the principle of equal pay for equal work.

Please contact us for more information or for a free consultation on how to expand your recruitment business to Germany.