Malaysia’s growing economy and skilled workforce make it an attractive destination for recruitment agencies. However, setting up a recruitment agency as a foreigner involves strict regulatory compliance under the Private Employment Agencies Act 1981, enforced by Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM), under the Ministry of Human Resources (MOHR).
This guide covers the different categories of recruitment agencies (A, B, C), capital and bond requirements, and how Amaze Advisory can assist you in navigating the regulatory process.
1. Categories of Private Recruitment Agencies (JTKSM Classification)
JTKSM classifies Private Recruitment Agencies (Agensi Pekerjaan Swasta, APS) into three categories (A, B, and C) based on the type of recruitment services offered.
| Category | Scope of Services | Target Workforce | Minimum Paid-Up Capital | Security Bond |
|---|---|---|---|---|
| Category A | Employment for local job seekers (Permanent & temporary placements) | Malaysian workers | RM 250,000 | RM 50,000 |
| Category B | Recruitment & placement of foreign workers | Foreign workers in approved sectors (e.g., construction, manufacturing, plantation) | RM 750,000 | RM 250,000 |
| Category C | Placement of domestic helpers (maids) | Domestic workers | RM 250,000 | RM 250,000 |
2. Business Registration & Licensing Requirements
Step 1: Incorporate a Private Limited Company (Sendiran Berhad/Sdn. Bhd.)
Foreigners must set up a Private Limited Company (Sendirian Berhad/Sdn. Bhd.) under the Companies Act 2016 before applying for a recruitment agency license.
- Minimum Paid-Up Capital Requirement (Refer to the table above).
- Shareholding Requirement:
- Foreigners can own 49% equity in Category A, B and C agencies and will require a local partner to own the 51% equity
Amaze Advisory helps foreign investors incorporate Sdn. Bhd. companies and secure the local partner and nominee in Malaysia quickly and efficiently.
Step 2: Apply for a Private Employment Agency License (JTKSM License)
All recruitment agencies must obtain a Private Employment Agency License (Lesen Agensi Pekerjaan Swasta, APS) from JTKSM (Ministry of Human Resources).
- License Validity: 1 year, renewable annually.
- License Application Fee: RM 500 – RM 1,500 (depending on category).
- Security Bond Requirement (Refer to the table above).
Amaze Advisory assists in preparing and submitting your JTKSM License application.
Step 3: Obtain Additional Approvals (If Applicable)
For Foreign Worker Recruitment Agencies (Category B):
- Approval from Ministry of Home Affairs (MOHA).
- Must comply with foreign worker quota regulations.
For Domestic Helper Agencies (Category C):
- Approval from Department of Labour (JTKSM).
- Compliance with Maid Employment Policies.
3. Compliance & Operational Requirements
- Physical Office Premises: Required for license approval.
- Financial Reporting: Submission of audited financial statements to MOHR annually.
- Employment Contracts: Must comply with the Employment Act 1955 and Labour Laws.
- Ethical Recruitment Practices: Agencies must not charge job seekers fees for placement.
4. Challenges & How Amaze Advisory Can Help
Setting up a recruitment agency in Malaysia involves strict regulations, financial commitments, and compliance with JTKSM and MOHA policies. Below are common challenges and how Amaze Advisory can assist you.
| Challengesy | How Amaze Advisory Can Help |
|---|---|
| Local Equity Participation, High Paid-up Capital & Security Bond | Assist you to secure local partner and guide you on capital structuring and security bond preparation to meet licensing requirements. |
| Strict Licensing & Approval Process | Assist in applying for a Private Employment Agency License (JTKSM License) and sedcuring MOHA approvals. |
| Compliance with JTKSM Regulations | Ensure your business follows JTKSM rules, including employment contract compliance and ethical hiring practices. |
| Accounting & Financial Reporting | Provide accounting, bookkeeping, and audit services to meet regulatory submission requirements. |
| Operational & Legal Complexities | Offer business advisory services to ensure smooth recruitment operations and adherence to labour laws. |
At Amaze Advisory, we provide end-to-end business setup solutions, including:
- Company Incorporation, Company Secretary and Nominee Services
- Accounting & Financial Advisory
- Tax & Advisory
- Payroll Outsourcing
- Employer of Record (EOR)
- Immigration & Global Mobility
Get Started with Amaze Advisory Today!
Phone: +6013-284 7678 / +6013-323 7678
Website: www.amazeadvisory.com
Let Amaze Advisory simplify your journey in setting up a recruitment agency in Malaysia!
Disclaimer
The information provided in this article is intended for general informational purposes only and may not reflect the most current regulations or legal developments. We recommend consulting with a professional or official government resources for the latest updates. Amaze Advisory is not liable for any inaccuracies or actions taken based on this article.
