Starting a recruitment agency in Ireland requires more than forming an LTD and publishing job advertisements. The business model determines who employs each worker, who operates payroll, how clients are charged and which employment protections apply. An employment-agency licence is also separate from CRO incorporation.
This guide covers permanent placement and temporary agency work, the WRC licensing route, company formation, VAT, PAYE, contracts and candidate data. It is general information. Employment agencies should obtain legal, payroll, tax and data-protection advice for their actual model.
Choose the agency model before incorporating
Permanent placement, executive search, contract recruitment and temporary staffing do not create identical cash flow or responsibilities. Decide whether the client or agency employs the worker, who directs the work, who pays wages and what the agency invoices before applying for the licence or tax registrations.
Permanent placement versus temporary staffing
In a permanent-placement model, the agency finds a candidate and the client normally employs that person. The agency earns a placement or search fee under its client agreement. In a temporary-agency model, the worker may be employed by the agency and assigned to perform work under a hirer's direction and supervision.
The second model is operationally heavier. The agency may fund payroll before the client pays, manage holiday and statutory entitlements, process timesheets, apply equal-treatment rules and carry employer risk. A hybrid agency should keep the contracts, invoices and records for each service clearly separated.
Irish employment-agency licence
The Workplace Relations Commission states that an employment agency must hold a licence to carry on its business under the Employment Agency Act 1971. The WRC employment-agency guidance currently lists an annual EUR500 fee and yearly renewal.
The application process includes good-character requirements supported by independent references and Garda vetting. Where the agency has premises in Ireland, the WRC guidance also addresses prescribed accommodation and health-and-safety requirements. Use the current WRC forms and contact its Licensing Section before trading, because incorporation is not the licence.
The WRC publishes a list of licensed agencies and has inspection powers concerning agency premises, books and records. Operating without the required licence is an offence. Build the application lead time into the launch plan and do not market the company as licensed until the licence has actually been issued.
Company formation requirements
A private company limited by shares normally needs:
- An acceptable company name and LTD constitution.
- A physical registered office address in Ireland.
- At least one director aged 18 or older.
- A company secretary who is different from the sole director.
- An EEA-resident director or an available statutory alternative.
- Shareholder, share-allocation and beneficial-owner information.
- PPSN details or the applicable identity-verification and IPN route.
- A specific recruitment or employment-agency activity for Form A1.
CRO acceptance of the company name does not approve the agency service or licence. Avoid a name that implies government, professional or regulated approval the business does not hold. Use the formation-document guide to prepare the incorporation details.
Agency-worker rights and equal treatment
The WRC defines an agency worker as an individual employed by an employment agency under a contract of employment and assigned to work under another person's direction and supervision. Its agency-worker guidance states that temporary agency workers must receive equal treatment with directly hired workers in areas including pay, working time, rest, overtime, annual leave and public holidays.
Agency workers also have rights concerning access to specified workplace facilities and information about vacancies. The agency and hirer need an information process that identifies the correct comparable terms before an assignment starts. Do not wait for a complaint to discover the hirer's pay and working-time arrangements.
The WRC also states that an employment agency cannot charge an individual a fee for seeking or finding employment arrangements. Client fee terms should be transparent and should not shift a prohibited placement cost to the candidate.
Client and candidate contracts
A permanent-placement agreement should address the role brief, fee trigger, replacement or rebate terms, candidate ownership, introduction period, confidentiality and payment. An executive-search mandate may also include exclusivity, milestones and research obligations.
Temporary staffing needs a more detailed chain: worker employment terms, assignment information, hirer agreement, rates, timesheets, overtime, expenses, workplace safety, supervision, absence, termination and responsibility for supplied information. Put the correct legal company name on every agreement and invoice.
Payroll and working-capital planning
If the agency employs workers, it should register as an employer before the first payment and operate PAYE, PRSI and USC as required. Payroll submissions, payslips, leave, working-time records and statutory employment records need reliable systems. Use our PAYE registration guide as a starting checklist.
Temporary staffing can create a large funding gap because wages and taxes fall due before the client invoice is collected. Model weekly payroll, employer PRSI, holiday accrual, sick leave, insurance, pension obligations where relevant, client credit periods and bad debt. A profitable margin can still produce a cash-flow crisis if the agency is undercapitalised.
VAT on placements and staff supply
Revenue's supply-of-staff guidance states that the standard VAT rate applies to the provision, sourcing, placement and secondment of staff. The taxable amount can depend on the legal and payment model.
Revenue's employment-agency manual distinguishes placement-only services from specified payroll-bureau arrangements and direct wage reimbursements. Do not assume VAT applies only to the agency's profit margin. Have the accountant review the full contract and money flow, including wages, employer PRSI, holiday pay and the agency fee, before creating invoices.
Candidate data and GDPR
CVs, contact details, interview notes, work history, references and right-to-work evidence are personal data. Health, disability, ethnicity and some background information may involve special-category or particularly sensitive processing. The agency needs a lawful basis, clear privacy information, access controls, retention rules and a process for candidate rights.
Decide when a CV can be shared with a client and record the candidate's expectations. Do not keep every unsuccessful application indefinitely. The Data Protection Commission explains that processing requires an Article 6 lawful basis and that controllers using processors must put the required data-processing contract in place. Review the DPC's lawful-basis guidance when designing the applicant-tracking workflow.
Employment equality and job advertising
Employment equality law applies to access to employment and prohibits discriminatory advertising and recruitment practices on protected grounds. Create objective role criteria, train recruiters, document shortlisting decisions and review automated screening tools for unfair effects. A client's discriminatory instruction should not be accepted or disguised.
Where roles require employment permits, professional registration, background checks or work with vulnerable people, verify the lawful process and evidence. A recruitment agency cannot use company formation to bypass immigration, equality, vetting or professional rules.
Banking, insurance and operational controls
Prepare the company documents, licence plan, client pipeline, service model, ownership evidence and forecast for bank onboarding. Temporary staffing providers should explain payroll volumes and client payment terms. Incorporation does not guarantee an account or credit facility.
Discuss professional indemnity, employers' liability, cyber, public liability and other relevant cover with a broker. Limit access to candidate and payroll systems, use multi-factor authentication, control exports and maintain a tested incident plan.
Recruitment agency launch checklist
- Choose permanent placement, search, temporary staffing or a defined combination.
- Confirm the employer, hirer, payroll and supervision model.
- Form the LTD and complete beneficial ownership.
- Apply for the employment-agency licence using current WRC requirements.
- Register Corporation Tax, VAT and employer PAYE as required.
- Prepare client, candidate, worker and hirer agreements.
- Implement equal-treatment, payroll and statutory-record systems.
- Create privacy, retention, security and candidate-rights procedures.
- Arrange insurance, banking and sufficient payroll working capital.
- Calendar licence renewal and CRO, Revenue and employment deadlines.
Form the company, then complete the regulated setup
StartCompany.ie can help create the Irish LTD while employment, licensing, tax and data-protection advisers complete the operating framework. Compare formation packages or send us the proposed officers, shareholders and agency model to start the company filing.