How to Start a Recruitment Company in Canada?: Steps & Documents

Are you ready to dive into one of Canada’s most thriving industries? Opening a recruitment company in Canada is more than just a business opportunity—it’s your chance to bridge the gap between talent and opportunity in a market buzzing with potential. With over a million job vacancies annually and employers on the hunt for skilled professionals, the demand for recruitment services has never been higher.

Whether you’re an ambitious entrepreneur, a budding startup, or an established recruitment agency looking to expand, Canada offers a goldmine of opportunities.

From the booming tech sector to the ever-growing healthcare industry, this guide will walk you through everything you need to know to start a recruitment business in Canada. Let’s get started!

Why Start a Recruitment Business in Canada?

Canada’s growing economy and diverse job market make it a hotspot for recruitment businesses. 

Here are certain reasons why opening a recruitment agency in Canada is a smart move:

High Demand for Recruitment Services

Recruitment agencies in Canada play a pivotal role in connecting employers with qualified candidates. Industries like technology, healthcare, construction, and finance face ongoing talent shortages, creating a lucrative market for recruitment services.

Profitability of the Recruitment Business

Recruitment businesses often generate income through placement fees, which can range from 15% to 25% of a candidate’s annual salary. With proper client relationships and an effective sourcing strategy, agencies can achieve significant profit margins.

Supportive Business Environment

Canada’s transparent regulatory framework and incentives for small businesses provide a conducive environment for growth. Moreover, the multicultural workforce ensures access to a diverse talent pool, further enhancing the value of recruitment services.

Steps to Open a Recruitment Company in Canada

Starting a recruitment company in Canada involves the following key steps:

1. Perform Market Research

Identify your niche—whether it’s IT, healthcare, construction, or general staffing. Understanding industry-specific demands will help tailor your services effectively.

2. Register Your Business

• Selecting the legal structure: Selecting the appropriate business structure is the first step in starting a recruitment agency in Canada. Whether you choose a corporation, partnership, or single proprietorship, each structure has advantages and disadvantages of its own.
• Register your business name: To create your brand in the marketplace, register your company name with the Canadian government or the relevant provincial authorities. Our experts from OnDemand International can assist you with this phase.
• Acquire a Business Number (BN): Next, you must acquire a Business Number (BN) from the Canada Revenue Agency (CRA). This unique identifier is essential for handling taxes, payroll, and other financial transactions, ensuring your business operates smoothly and complies with Canadian regulations. 

3. Obtain Licenses and Permits

Certain provinces, like Ontario, require specific licenses for operating recruitment agencies. For example, in Ontario, you must comply with the Employment Protection for Foreign Nationals Act if your business recruits foreign workers.

4. Set Up an Office

Decide whether you’ll operate virtually or set up a physical office. A professional address can enhance credibility, but many modern agencies thrive with remote operations.

Documents Required to Start a Recruitment Agency in Canada

To legally operate a recruitment business in Canada, you’ll need the following documents:

• Business registration certificate.
• Tax registration number from the CRA.
• Provincial licensing documents (if applicable).
• Employment agreements and contracts.
• Proof of office address (if setting up a physical office).

Expected Costs to Start a Recruitment Company in Canada

The costs of setting up a recruitment agency in Canada can be around CAD 5000 to CAD 6000 depending on factors like location, business size, and operational model. 

Here’s a breakdown of typical expenses:

• Business registration: CAD 500- CAD 1000 (depending on the province).
• Licenses and permits: CAD 500–1,500.
• Office setup: CAD 5,000–15,000 (for physical locations).
• Marketing and advertising: CAD 2,000–5,000 initially.

Benefits of Setting Up a Recruitment Agency in Canada

1. Steady Demand for Talent

With over 1 million job vacancies reported in 2024, the demand for recruitment services is at an all-time high.

2. Global Workforce Integration

Canada welcomes skilled workers from around the world, providing recruitment agencies with a unique opportunity to specialize in international hiring.

3. Scalable Business Model

Recruitment businesses can easily scale by expanding into new industries or geographic regions within Canada.

Industry-Specific Opportunities for Recruitment Businesses in Canada

1. Technology Sector: With companies competing for top tech talent, recruitment agencies specializing in IT placements are in high demand.
2. Healthcare: The aging population drives the need for healthcare professionals like nurses, therapists, and caregivers.
3. Construction: The infrastructure boom has created a demand for skilled tradespeople across provinces.
4. Immigration Services: Agencies can cater to businesses hiring international candidates by assisting with work permits and visa applications.

Conclusion

Starting a recruitment company in Canada is a rewarding venture, thanks to the growing demand for staffing solutions and a supportive business environment. Whether you’re an entrepreneur entering the industry or an established agency looking to expand, Canada offers ample opportunities to thrive.

By focusing on industry-specific needs, building strong client relationships, and leveraging technology, your recruitment agency can become a trusted partner for businesses across Canada.

If you’re ready to take the next step, speak with our Canadian business experts right away.