New solutions in 2016: Representative Office by Stogram
Because of the current global economic situation, one of the most urgent issues is to reduce the cost as much as you can. Especially for foreign companies that have their own headquarter office in around the world, it would be effective way to reduce its cost by outsourcing the operation to a representative office.
One of our clients decided to turn his office in Japan to a interactive and representative office in Hungary, Europe. To see the costs and figure we digged the details for you.
According to his up-to-date information the followings are the major costs when you operate Japan representative office by yourself.
1. Employment cost
Certainly one of the biggest cost on the list. For exapmple if you hire one Japanese sales engineer or office manager, his average annual salary would be about USD100,000. And in addition, you would have to pay health insurance and pension for him. Therefore the total cost for one person for your office would be about USD150,000.
2. Office rental costs
In Japan, people do not prefer to do business with a company whose office is a kind of SOHO (Small Office Home Office). As a consequence, you need to rent a office where is convenient to visit your customers. And the most popular place for foreign companies to have their office is in Tokyo. However, the rental cost of an office, even if it is only for one person, is quite expensive compared to other countries. Geneerally, it would cost about USD3,000 per month, which means about USD36,000 per year.
3. Other neccesary costs
As long as you have your representative office in Japan, your office manager would have to go to tax office, city government, social insurance office, etc. in order to operate your office. He would also need to prepare a lot of documentations for these offices many times. And he need to spend time for doing it, this is also a cost for you.
As mentioned above, in order to operate your office in Japan and hire only one person, it would cost at least USD200,000 per year. However, if you outsource the operation of it, its cost would be less than half. Also, if it is not necessary to work in full-time, you can reduce much more cost. Therefore outsourcing your representative office especially to a European small service center is one of the most effective way to reduce your costs.
If you wish to have more information on our new solutions and on office representation please contact us by phone or by mail. Check us on: http://stogram.hu/representation/
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