Look Office: 8 Types of Expenses Incurred When Renting an Office

When renting an office, except for the office rent to pay for the building, there are many other costs (expenses incurred). These costs are payable to operate the office. Besides, it also greatly affects the total cost in the end.

8 types of expenses incurred when renting an office

1. Service fee

It is the cost that the lessee pays to the management department of the building to maintain the services and utilities, including reception services, security, public area cleaning, domestic water utilities. WC area, corridor lighting, and air conditioning system, elevator system, insect control, tree care…

The normal service fee does not include electricity, parking, and motorbike.

Service fees range from $2 to $8, at Grade B offices the service fee will be from $4 or more, Grade A offices from $6 or more.

2. VAT

VAT is charged at 10% of the total office rental cost.

3. Electricity bill to use the air conditioner

In Grade A and Grade B office buildings, the service fee usually includes electricity for using air conditioners. Class C office buildings do not, or service charges under $4 do not include air conditioning fees.

Actual statistics at buildings do not include electricity and air conditioning, the average electricity bill is 1-1.5 USD/m2/month. The cost incurred may vary depending on the time of use, the type of machine, and the new age of the air conditioner.

4. Electricity consumption in the office

Each company will be provided with a separate electricity meter, the electricity bill will be calculated according to the amount of electricity the business has used in the month. Normally, this fee will be calculated according to the business electricity price of the state.

In case no separate electricity meter is used, the used electricity will be calculated in 2 ways:

Calculating according to the rented area, the formula is: (Total electricity consumption of the whole building/ Total usable area) * Rented area.

Calculated by equipment, the formula is (Total electricity consumed by the whole building/ Total equipment used) * Equipment used in the office.

5. Parking rental fee by month (expenses incurred)

This cost will be paid by the tenant to the car custodian. Guests can rent parking spaces inside the building or outside (adjacent parking lots).

The cost of motorbike parking in the central area will range from $8-15/vehicle/month, in remote areas from $5-8/car/month.

The cost of car parking in the central area is from 150$-250$/car/month, in remote areas from 60-150$/car/month.

In addition, in some buildings, there will be a free parking policy depending on the rental area, but most are not. Tenants need to negotiate when signing the contract.

6. Overtime (OT) fee

This is the amount tenants have to pay for the building if they work after office hours (8 am – 6 pm). Depending on the building, each fee can be different, or free.

This cost is used to pay for elevator electricity, public area electricity bill, WC water bill, overtime salary of operator… after office hours. Especially when working overtime, if the central air conditioner is not used, there is a collection building, there is a building that does not charge a fee, or the fee when using it will be different from the fee when not in use.

There are 3 ways to charge overtime:

By office: For example 200,000 VND/office/hour.

Calculation by rental area: Example 0.02 USD/m2/hour * Rented area.

Calculate by device: For example 0.02 USD/machine/hour.

In addition, businesses can negotiate overtime costs. Or businesses can install more local air conditioners, fans instead of central systems to reduce overtime costs.

7. Service fee during interior construction

Interior construction time lasts from 1 week to 1 month on average. During this time, the building can usually waive the office rent, but not the service and electricity bills.

However, the service fee during the interior construction period is a cost that only needs to be paid once during the rental period.

8. Ground return fee

This cost is used to pay for demolition and cleaning of all partitions, interior decoration items that have been built and installed to hand over the original ground (concrete floor or brick floor depending on the design of the customer) upon the termination of the contract. This cost will be borne by the tenant.

For Foreign companies that want to start or expand businesses and look for an office in Vietnam: