An employment agency helps other companies with their recruitment and staffing needs, normally acting as the middle party between employers and potential employees.
All employment agencies are required to apply an Employment Agency License (EAL) prior to starting its business activities. This is the basic license required for all categories of recruitment agencies and is governed by the Ministry of Manpower (MOM) of Singapore.
Depending upon the profile of your candidates, an employment agency can choose to apply for
- Select License – designed for employment agencies that place local or foreign candidates who earn a monthly base salary of more than S$7,000.
- Comprehensive License – for all other employment agencies that do not qualify for the Select license.
Banker’s Guarantee Requirement
Both types of agencies are required to furnish a Security Deposit in the form of Banker’s Guarantee to MOM. The security bond requirements are:
- Select License – S$20,000
- Comprehensive License – between S$20,000 to S$60,000 depending on their placement volume and track record.
Many agencies purchase the bond from the banks since it is called “Banker’s Guarantee”. But banks typically require 100% deposits with the banks as cash collateral. That means if you are a start-up, you have to lock $60,000 with the bank and severely affect your business cash flow.
Employment Agency Bond
You may not be aware that you can purchase a security bond through an insurance company who can issue the Banker’s Guarantee on your behalf.
The biggest benefit of using an insurance company is that you normally don’t have to deposit your money with the insurer, but merely acting as an guarantor for the bond.
In this case, you can free up your $60,000 cash to run your core business.
Contact us for a quote
We specialise in such bond with the most competitive quote. We have helped many employment agencies especially the start-ups.
In order to apply for the bond, you need to prepare the following documents.
- Latest ACRA Bizfile of the company or sole proprietor
- NRIC and last year income tax documents of two guarantors for the bond.
Contact us using the form below for a non-obligatory quote.