THE PLIGHT OF PLACEMENT AGENTS Foreign employment agencies struggle amid licence fee hikes, equalisation brings relief

• This regional categorisation created unnecessary problems and turned foreign employment into an expensive business that only rich individuals could afford
• By making the fee the same for everyone, the government has made it more affordable for genuine business owners and improved transparency in the system
• Foreign employment is vital to our economy and brings in large foreign remittances. Fair regulation will protect workers and agencies while preventing exploitation

For years, a fragmented and prohibitively expensive licensing regime turned Sri Lanka’s foreign employment sector into an exclusive enclave for the financial elite. By pegging fees to destination regions, previous administrations inadvertently fostered a “mafia” culture that shuttered dozens of smaller agencies. The current government’s move to equalise the bank guarantee at a flat Rs. 3 million marks a pivotal shift toward transparency. This standardisation is not merely a fiscal adjustment; it is the necessary dismantling of a discriminatory system.

Foreign employment agencies have become a business mainly affordable to the wealthy due to repeated increases in one-time licence fees (Bank Guarantee), the founder of the United Vision Platform of Licensed Foreign Employment Agencies M.Z.M. Azzam said. 

Speaking to the Daily Mirror, he said that under previous governments, licence fees were increased up to Rs. 9 million, depending on the destination country. 

Agencies sending workers to the Middle East had to pay Rs. 3 million, those operating in Israel paid Rs. 9 million, while agencies handling European placements were charged Rs. 5 million. 

“This regional categorisation created unnecessary problems and turned foreign employment into an expensive business that only rich individuals could afford,” he said. 

These sharp fee increases badly affected the sector. Nearly 50 agencies were forced to close due to financial pressure. Experts also warned that when proposals were made last year to raise the licence fee to Rs. 5 million, up to 400 more agencies could have shut down. 

However, under the current government, the one-time licence fee has been standardised at Rs. 3 million for all agencies, regardless of the region they operate in. According to the chairman, this decision has helped reduce corruption and mafia influence that had affected the sector for many years. 

“By making the fee the same for everyone, the government has made it more affordable for genuine business owners and improved transparency in the system,” he said. 

He also said a broader reform plan is being prepared to improve the foreign employment sector. 

United Vision Platform Founder MZM Azzam

A detailed proposal covering 23 key issues, including government-to-government agreements, worker welfare, and regulatory reforms, is scheduled to be submitted to the relevant minister. 

He stressed that these proposals aim to protect both migrant workers and employment agencies, while strengthening accountability in the sector. 

Industry stakeholders have welcomed the equalisation of licence fees but continue to raise concerns about the long-term survival of the sector. Many small and medium-sized agencies struggled during the period of high licence charges. 

The chairman emphasised the need for continued government support and policy reforms to ensure foreign employment remains a stable source of income for Sri Lankan workers and agencies. 

“Foreign employment is vital to our economy and brings in large foreign remittances. Fair regulation will protect workers and agencies while preventing exploitation,” he said. 

With hundreds of agencies previously at risk of closure, the current fee structure has provided much-needed relief. Industry leaders are urging the government to move quickly to implement the remaining reforms to support sustainable growth, reduce corruption, and strengthen international labour cooperation. 

The chairman expressed confidence that the sector can regain stability under the new regulations, creating opportunities for genuine entrepreneurs and ensuring better protection for Sri Lankan migrant workers overseas.