What are the costs of starting up and operating an office in Japan?

J-Seed typically charges 500,000 yen (About Us$5,000 or 3,700 EUR) to start a branch office and 1,000,000 yen (About Us$10,000 or 7,500 EUR) to start a subsidiary. This includes all filing fees. Quotes are firm and will not change as long as the scope of the work is not increased, with any new charges due to new requirements confirmed with clients ahead of time before any work is done.

J-Seed has helped companies with a variety of business models start up in Japan. Some companies which are seeking to license technology in Japan simply need an unmanned legal entity in order to meet customer requirements for a local entity to transact with. Others require a virtual small office arranged through an office service that takes calls and relays messages. Some clients use a shared office facility, but have an employee in Japan (either a foreign national from headquarters or a local hire) to support and monitor local distributors, negotiate joint development agreements or gather customer and competitor intelligence. Some clients open their own office to provide direct local support to distributors or even sell to end customers directly.

As mentioned above, direct costs for startup run about 500,000 yen for a branch and twice that (about 1,000,000 yen) for a subsidiary. A subsidiary must also place the amount of its initial capital (e.g., 10 million yen) temporarily in a local bank account as a legal requirement, but these funds may be used for startup expenses a few days after the account is opened.

A 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 yen to 800,000 yen, with about 300,000 yen as the typical up front payment for deposits. Please contact J-Seed president Jeff Char for an introduction to J-Seed’s preferred supplier for shared office space.

Startup costs for your company’s own office in Japan typically start from about 300,000 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-months’ security deposit, 2-months’ key money, and broker’s fee). Typically, only about half of the security deposit will be refunded at the end of the lease. Again, J-Seed can introduce a dependable real estate agent that is used 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 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. J-Seed can introduce its preferred recruiting supplier which is dedicated to serving foreign companies in Japan.

J-Seed can also recommend preferred suppliers in IT infrastructure, accounting and other areas. Overall, J-Seed suggests that you budget 150,000 yen per month for an unmanned virtual office (with startup costs of 2 million yen including fees to J-Seed for a startup of a subsidiary), 1 million yen for a one person operation run out of a shared office facility (with startup costs of 4 million yen including fees to J-Seed a startup of a subsidiary) and 4 million yen for an independent 4 person office (with startup costs of 6 million yen including fees to J-Seed for a startup of a subsidiary). This figure excludes travel to headquarters.

To discuss the likely startup and operating costs that will come with your company’s optimal entry strategy for Japan, please contact J-Seed’s President Jeff Char who has extensive experience starting, structuring and operating companies in Japan.

Ready to open a branch or subsidiary in Japan? Please download and fill out a brief data sheet (branch or corporation) and send it to us. We will reply to you promptly regarding next steps.

If you understand the structures and costs, but want more advice on what you can do to make sure it all works right, click here.

Now that you’ve seen the details, if you want to be reminded again of the benefits of having an office in Japan, please click here.

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