“What are the exact costs and obligations associated with setting up a business in Japan?”
J-Seed typically charges 500,000 Yen (plus 8% consumption tax) to start a branch office and 1,000,000 Yen (plus 8% consumption tax) to start a subsidiary. The stated prices include all filing fees. Quotes are firm and will not change as long as the scope of the work does not differ from the usual set up process. Additional charges that might arise due to additional services required by the client will be discussed upfront before any work is done.
Under Japanese law a subsidiary must place an initial amount of capital (e.g., 10 million yen) in a local bank account, but these funds may be used for startup expenses a few days after the account is opened.
Another key decision you face is whether to open your own office or use a shared office facility. The monthly cost of a shared office in Japan runs from about 200,000 to 800,000 yen, with about 300,000 yen required as the typical up-front payment for deposit. Start-up costs for your company’s own office in Japan typically start from about 3,000,000 yen for a 5 person office. Many foreign companies are surprised to learn that the initial cost of securing an office may equal or exceed 10-month’s rent (i.e. first month’s rent, 6-month security deposit, 2-month key money, and the broker’s fee). Typically, only about half of the security deposit will be refunded at the end of the lease. As mentioned previously, J-Seed can introduce a dependable real estate agent who is accustomed to meeting the requirements of overseas clients at a competitive price.
The next major decision is whether to use the services of a shared secretary provided by a shared office service or to hire your own staff in Japan. Typical annual salaries including benefits run about 4-5 million yen for office help, 6-15 million yen for salespeople and 5-10 million yen for technical support staff. Recruiters normally charge about 30-35% of the candidate’s first-year salary as a finding fee. J-Seed can introduce its preferred recruiting supplier, which is a firm dedicated to serving foreign companies in Japan as well as its preferred suppliers in other areas such as IT infrastructure and accounting.
|Unmanned virtual office||1.2 million yen||10,000 yen|
|One-person operation (shared office)||2 million yen||40,000 yen|
|Four-person operation (independent office)||6 million yen||400,000 yen|
*includes J-Seed fee
To further discuss the likely start-up and operating costs that will come with your company’s optimal entry strategy for Japan, please contact us directly.