Recruitment licence in Switzerland: AVG permits explained

Switzerland regulates recruiters and staffing firms through the Employment Services Act (Arbeitsvermittlungsgesetz, AVG). It distinguishes two activities that need separate licences. Private placement (Arbeitsvermittlung) brings jobseekers and employers together so that they sign an employment contract with each other. Staff leasing (Personalverleih) means a business employs the worker itself and makes them available to a client who directs the work. A cantonal licence covers activity inside Switzerland. Cross-border placement or leasing also needs a licence from the State Secretariat for Economic Affairs (SECO). For a Swiss, German or Austrian company, the practical question is simple: does the recruiter, staffing firm or Employer of Record (EOR) you plan to use hold the right licence, and can you see it in SECO’s register?

Quick answer

What is the difference between placement and staff leasing?

The AVG treats the two activities differently because the employer is different.

Private placement under Article 2(1) AVG is bringing jobseekers and employers together so that they conclude an employment contract. The recruiter is not the employer. A licence is needed when placement is regular and for remuneration. The Employment Services Ordinance (AVV) defines “regular” as being ready to act in a plurality of cases or placing on ten or more occasions within twelve months (Article 2 AVV). “For remuneration” means the agent receives money or a monetary benefit in connection with the placement (Article 3 AVV). SECO’s directives and the Canton of Zurich treat headhunting and executive search as placement. Zurich also counts operating an internet platform that brings jobseekers and employers together.

Staff leasing under Article 12(1) AVG means a business employs the worker and makes them available to a client (the Einsatzbetrieb) while transferring essential powers of direction (Article 26 AVV). Indicators include integration into the client’s organisation, use of the client’s tools and the client bearing the risk of poor performance. Only temporary work and hire work need a licence (Article 28 AVV), and only when the activity is commercial. Article 29 AVV defines commercial leasing as leasing to clients regularly and with intent to make a profit (regular means more than ten leasing contracts with clients within twelve months), or leasing that brings in an annual turnover of at least CHF 100,000.

Cantonal licence or SECO licence?

Both activities start with an operating licence from the labour office of the canton where the business has its seat. SECO explains that this cantonal licence covers placement and leasing within Switzerland. It is unlimited in time and valid throughout Switzerland (Articles 4(1) and 15(1) AVG).

Cross-border activity additionally needs a federal licence granted by SECO:

• placement into or from abroad (Article 2(3) and (4) AVG), including placing a foreign national who is already in Switzerland but not yet entitled to work;
• leasing abroad (Article 12(2) AVG); and
• leasing newly arriving workers from abroad inside Switzerland, which SECO’s directives (section 3.1.4) also place under the federal licence. The register adds that a cantonal licence alone is not enough for persons with a short-stay (L) permit.

The SECO licence is limited to specific named states (Articles 4(2) and 15(2) AVG). The cantonal authority receives the application and forwards cross-border applications to SECO with its opinion (Articles 11(3) and 40(3) AVV). In non-complex cases the authorities decide within 40 days of receiving complete documents (Articles 11(4) and 40(4) AVV); complex applications can take longer.

Article 12(2) AVG closes the obvious gap: “Der Personalverleih vom Ausland in die Schweiz ist nicht gestattet.” A lender based abroad may not lease workers into Switzerland. SECO’s directives give the reason that foreign lenders cannot be adequately supervised. The same applies to direct placement: arbeit.swiss states that foreign placement agencies may not place people into jobs in Switzerland, and SECO’s directives allow it only through cooperation with a licensed Swiss placement business.

What does a business need to get a licence?

The conditions in Articles 3 and 13 AVG follow the same structure for placement and leasing:

• an entry in the Swiss commercial register;
• suitable business premises;
• no other business that could endanger the interests of jobseekers or employers (placement) or of workers or client businesses (leasing); and
• responsible managers who guarantee professional conduct and have a good reputation.

The Act’s wording requires managers to be Swiss citizens or holders of a settlement permit. SECO’s directives explain that, because of the free movement agreement, this nationality requirement no longer applies to EU and EFTA nationals who settle in Switzerland for the activity (B or G permit). Professional suitability usually means completed vocational training plus several years of experience in placement, leasing, HR or a related field (Articles 9 and 33 AVV). For cross-border licences, managers must also know the conditions in the states concerned.

Canton of Zurich practice, as one example, requires the responsible person to work at least 50 percent for the business and to hold signing authority. Other cantons may apply this differently, so confirm details with the competent cantonal office listed by arbeit.swiss.

How large is the deposit (Kaution)?

Only staff leasing needs a deposit. Article 14 AVG requires the lender to secure workers’ wage claims, and the amounts are set in Article 6 of the fees and deposits ordinance (GebV-AVG):

Situation	Deposit
Licensed lender, standard case	CHF 50,000
More than 60,000 assignment hours in the previous calendar year	CHF 100,000
Lender also licensed to lease abroad	plus CHF 50,000
Maximum a head office may lodge for itself and its branches	CHF 1,000,000

The licence is granted only once the deposit has been lodged (Article 35(2) AVV). Accepted forms are a bank or insurer guarantee, deposit insurance, cash bonds and cash (Article 37 AVV). Placement-only agencies lodge no deposit. Licence fees under the federal ordinance range from CHF 750 to CHF 1,650 depending on the authority’s effort, with changes from CHF 220 to CHF 850 (Articles 1 and 7 GebV-AVG); the granting authority, canton or SECO, sets the actual fee within that range.

Why does an Employer of Record need a staff-leasing licence?

An EOR employs a worker on behalf of a client that has no entity of its own in the country. In Switzerland the EOR runs payroll and social-security contributions, while the client directs the daily work. SECO’s directives (section 3.1.2.6, “Payrolling / Employer of Record”) assess this as staff leasing: the client is the hiring business, and the EOR is the lender, which normally needs a leasing licence because it provides workers commercially under Article 29 AVV.

For a German or Austrian client, a second point matters. SECO’s directives define the place of assignment as the client’s seat and say this does not change if the workers work online abroad. On that reading, a Swiss EOR serving a client in Germany or Austria leases abroad in the sense of the AVG and needs the SECO licence as well as the cantonal one. The directives’ EOR section does not address a client abroad expressly, so confirm the position with the competent cantonal labour office or SECO. The Employer of Record in Switzerland guide works through this case in detail, including contracts and what happens if the licence is missing.

Where the EOR’s main activity is staff leasing, the generally binding collective agreement for staff leasing (GAV Personalverleih) can apply. SECO’s directives describe that scope, and SECO’s table lists the agreement as valid until 31 December 2027. Ask the provider in writing whether it applies to the role.

How do you check whether a provider holds a licence?

SECO keeps a public register of licensed placement and leasing businesses together with the cantons (Article 35b AVG). To use it:

1. Ask the provider for the exact Swiss legal entity that will employ or place the worker, with its UID number.
2. Search the register by name or UID.
3. Read the leasing status and the placement status separately. The register shows “Keine Bewilligung vorhanden”, “Tätigkeit in der Schweiz” or “Tätigkeit in der Schweiz und grenzüberschreitend” (with a variant that also includes Liechtenstein).
4. For an EOR serving a client outside Switzerland, the leasing status should read “grenzüberschreitend”. The register’s own note says only those businesses may lease persons from Switzerland abroad or the other way round.
5. Keep a dated screenshot in your file and ask which states the SECO licence names.

A brochure, logo or sales assurance is not a substitute for this check.

What happens if the licence is missing?

The consequences fall on both sides:

• the leasing contract between lender and client is void (Article 22(5) AVG);
• the lender’s employment contract with the worker is invalid, and Article 320(3) of the Code of Obligations applies (Article 19(6) AVG);
• placing or leasing without a licence can be fined up to CHF 100,000 if intentional and up to CHF 20,000 if negligent (Article 39(1)(a) and (3) AVG); and
• an employer that intentionally uses the services of a placement agency or lender it knows has no licence can be fined up to CHF 40,000 (Article 39(2)(a) AVG).

Prosecution is a cantonal matter. The fines are maximum amounts, not standard penalties.

What does this mean for your hiring model?

If the hiring model is still open, the guide on employee, contractor or EOR compares the three routes. The table below shows where a licence matters.

When may an EOR help?

An EOR may help when the role is genuine employment, your company has no Swiss entity, and you want a Swiss employer to run payroll and social insurance. Ask the provider which Swiss entity employs the worker and to show its register entry as a cross-border leasing business. If that fits, ask Deel about EOR options in Switzerland (opens in a new tab) and request the licence details in writing.

When may an EOR not fit?

An EOR may not fit when you already have a Swiss entity, when direct foreign employment is manageable, or when the provider cannot show a cross-border leasing licence for its Swiss entity. It also does not decide your own tax position in Switzerland; see permanent establishment risk from remote employees.

Key terms

Employee

A worker engaged under a local employment contract, with the employer responsible for payroll, social security contributions and compliance with local labour law.

Employer of Record (EOR)

A third-party provider that legally employs a worker on behalf of a client company in a country where the client has no local entity, handling local payroll, contracts and compliance.

Contractor

A self-employed individual or business engaged for specific services under a commercial contract, without the employment protections or payroll obligations that apply to employees.

Final checklist

• Decide whether you need placement (you employ) or staff leasing (the provider employs).
• Ask for the provider’s Swiss legal entity and UID.
• Check the SECO register: correct licence type, and “grenzüberschreitend” for any cross-border set-up.
• For leasing, confirm the deposit is lodged and ask about the GAV Personalverleih.
• Do not accept leasing from a foreign entity into Switzerland.
• File the register screenshot and the written licence confirmation.
• If the hiring model is still open, read employee, contractor or EOR: how to choose.
• If an EOR remains the right model, discuss your Swiss hire with Deel (opens in a new tab) and compare the answer with a licensed Swiss staffing firm.