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 Japan office, it would be effective way to reduce its cost by outsourcing the operation of Japan office.
Followings would be major costs when you operate Japan representative office by yourself.?
1. Employment cost
Employment cost is the one of the biggest cost. If you hire one Japanese sales engineer or office manager, the average annual salary would be about USD100,000. And in addition to this, 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. Rent office cost
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 rent cost of 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 cost
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 perare 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 in the 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 is one of the most effective way to reduce your cost.