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Recruitment Business in India


Introduction: India is a country with a large market and a huge population. With the population of 1.35 billion people, it is a place full of biggest and brightest talented people. It is very rich in terms of human resource as large numbers of people who are highly qualified are available in India that too at very genuine rates. There are a large number of opportunities for the recruitment agencies as people are in search of work here. They are easily ready to relocate inside and outside India if they get a good opportunity. With such a big population it is very much important to make it a productive population and place right people on the right job as per their qualification. Here recruiter franchise plays a very vital role in selecting and placing people in the right place. Now let’s see what are the rules and regulations which we need to follow for doing recruitment business in India.


Business Configuration:

Recruitment agencies have to enter into a contract with the companies for providing manpower. They also need to register with the tax department, ministry of overseas Indian affairs, Provident Fund Corporation and many more. It is very important for any business structure to carry out the limited liability status. Limited liability is also good for scaling up the business as it promoters from unforeseen liability and helps in raising account of the business. In addition to limited companies, you will get better access, continuity & transfer ability.

Registration for TAX:

The recruitment business provides the recruitment to the people so they are taxable under the service tax regimen at the rate of 12.36%. This tax is applicable on the amount of service fee charges by the recruitment agencies. Although small service providers who do not earn more than 10 lakhs in the financial year are exempted for paying tax. The good part is that VAT & TNI registration is not required for the recruitment industry as they are not selling goods and services.

Registry with Ministry of Overseas Indian Affairs:

This registration is required if the recruiter franchise is recruiting people outside India than it is mandated to be registered with Ministry of Indian Affairs as a recruiting Agent. As per emigration act 1983, only those agents can register with the ministry of overseas Indian affairs who has a bank guarantee of 20 lakhs. Simply by filling the form in the prescribed format with the supporting documents and completing several other formalities.

ESI/Provident Fund Registration:

ESI means employee state insurance it is managed by employee state Insurance Corporation it is an autonomous body created by the law under the Ministry of Labour and employment, the government of India. This scheme was started by the government of India in order to give benefits such as medical, monetary and several other benefits to the employers. They cover several benefits such as sickness benefit, a medical benefit to the employee and his family, maternity benefit to the women who are pregnant. If an employee’s death happens while working 90% of the salary is given to the dependents every month after the death of the employee, old age care medical expenses and many more. If the recruitment business consists of 10 or less than 10 people ESI registration is not required but if people exceed more than 20 than ESI registration is required. Similarly, PF registration is required if people exceed more than 20.

Recruiter’s License:

For completing the formalities are recruiter agent license you need to complete the below-mentioned formalities:
1) Prescribed format
2) Demand draft of RS 25000.
3) Degree certificate of the promoters.
4) Income tax return of the promoters.
5) Assets and liability statement of the promoters.
6) Bank guarantee for an amount of 20 lakhs.

Above mentioned information will help you if you are interested in opening recruitment business in India.
The scope of the recruitment business in India:

It is the fact that India is full of human potential so it is very important to fit them according to their job profile. So the chance of starting a recruitment agency in India is very wider. Majority of companies are using recruitment agencies for placing their manpower. Recruitment agencies with the help of their employment seeker database and vacancies available try to filter the best candidate for the right job. Here we can say that looking at the demand of companies for selecting people for the job placement scope of recruiter agencies are going to be increased in the upcoming future.


Multinational Companies are now days depended on these recruiter franchises for their manpower from the top level to bottom level employees hence basis on that we can say that the future is bright for such agencies in India at present.

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