What do office rental costs include? Complete guides for businesses

Many businesses are caught off guard when their office invoice arrives 40–60% higher than the listed price. The reason is that office rental costs are made up of multiple components that are not always clearly understood from the outset. This article by Inspire Hub provides a comprehensive breakdown of every cost component, a step-by-step guide to calculating your true total office rental fixed costs, the latest tax regulations, and practical strategies to optimize your office budget.

What are office rental costs?

Office rental costs refer to the total expenditures a business must pay in order to occupy and use a workspace for a defined period of time, encompassing the base rent for the floor space as well as all associated operating fees, utilities, and financial obligations.

In practice, the listed rental price is not the final amount a business actually pays. According to market sources and office leasing consultants, the true total office rental costs for a traditional office in Ho Chi Minh City are typically significantly higher than the base rent, once management fees, electricity, water, internet, VAT, and related operating expenses are factored in.

What do company office rental costs include?

Below is a complete breakdown of every cost component businesses need to understand when renting a traditional office in Ho Chi Minh City.

Base rent

Base rent is the foundational office rental cost a business pays for the right to use a floor area, varying by building grade (A, B, or C) and geographic location. In a traditional office model, this figure typically reflects only the raw space rental and does not yet include building management fees, utilities, internet, or other operating charges.

Service charges

Building management fees are the most commonly overlooked item when reviewing a rental quote. This charge covers the operation of elevators, fire protection systems, common security, corridor cleaning, and maintenance of shared areas, ranging from 50,000 to 150,000 VND/m²/month depending on building grade. For a 150m² office floor, service charges alone can reach 12–22 million VND per month.

VAT

Office rental services are subject to 10% VAT, applied to the entire invoice including both base rent and service charges. This is a mandatory, non-negotiable cost, however, businesses registered for VAT under the deduction method can reclaim this input VAT, meaning the effective office rental cost is only the pre-VAT portion.

Electricity, water, and air conditioning

This is a variable cost that is consistently underestimated. In Ho Chi Minh City, office electricity is billed at commercial rates, with central air conditioning systems typically running 8-10 hours per day. Actual electricity costs commonly range from 6-15 million VND/month per 100m² of occupied space, depending on usage intensity. Some buildings meter electricity separately; others include it within the service charge.

Parking fees

Given Ho Chi Minh City’s traffic conditions, parking is a material office rental fixed cost for teams using personal vehicles. Typical rates at Grade A-B buildings: motorbikes from 200,000-400,000 VND/motorbike/month; cars from 1,500,000-3,000,000 VND/car/month. For a team of 15 people commuting by motorbike, parking alone amounts to 3–6 million VND per month.

How to calculate total office rental costs

Businesses can calculate their total monthly office rental costs using the following reference formula:

Total Monthly Cost = Base rent + Service charges + Electricity + Water + Parking + 10% VAT

Example: A traditional 150m² office in District 1 would include the following costs:

Beyond monthly office rental costs, businesses taking traditional office space must also account for one-time upfront expenditures: a security deposit of 3-6 months’ rent, plus interior fit-out and equipment installation costs ranging from 500 million to 2 billion VND depending on floor area and finish standard.

Latest regulations on office rental costs

When office rental costs are tax-deductible

Under Article 4 of Circular 96/2015/TT-BTC and current guidance, office rental costs qualify as deductible expenses for Corporate Income Tax (CIT) purposes when all three of the following conditions are met simultaneously:

• The expense is directly related to the business’s lawful production and commercial activities
• Full valid invoices and supporting documents are in place as required by current law
• Payment is made via bank transfer for transactions of 20 million VND or more — cash payments for monthly rent exceeding 20 million VND will not be accepted as a deductible expense

Required documentation by lease scenario

Case 1: Renting from a legal entity (company or organization)

• Lease agreement with complete information from both parties
• Valid VAT invoice issued by the lessor
• Bank transfer payment records (for transactions ≥ 20 million VND)

Case 2: Renting from an individual with rental income ≤ 100 million VND/year

• Lease agreement (notarization not required)
• Payment records (bank transfer or cash receipt with itemized statement)
• The individual lessor is not required to issue an invoice and is exempt from VAT and PIT

Case 3: Renting from an individual with rental income > 100 million VND/year

• Lease agreement
• Tax payment records for PIT and VAT paid on behalf of the individual (if the contract assigns this obligation to the business)
• Bank transfer payment records
• The business may include the tax paid on the individual’s behalf as a deductible expense if full tax payment documentation is maintained

VAT on office rental services

The VAT rate applicable to office rental services is 10%. Businesses registered under the VAT deduction method may claim input VAT from office rental invoices, which significantly reduces the effective office rental cost compared to businesses not registered for VAT.

Accounting treatment for office rental costs

Depending on how the office is used, office rental costs are recorded in different accounts:

• Office used as administrative headquarters: Account 642 (General and Administrative Expenses)
• Office used as a sales or distribution location: Account 641 (Selling Expenses)
• Office doubling as a production facility: Account 627 (Manufacturing Overhead)
• Deductible input VAT: Account 133 (Creditable Input VAT)

Example: A business paying 100 million VND/month rent plus 10 million VND VAT would record:

• Debit Account 642: 100 million

• Debit Account 133: 10 million

• Credit Account 111/112: 110 million

Common mistakes when evaluating office rental costs

The following are the most frequent miscalculations made by startups and foreign companies when budgeting for office space:

• Looking only at listed rent and ignoring total actual cost: The advertised rate for a traditional office typically represents only 50-60% of the real office rental cost once service charges, electricity, parking, and VAT are added.
• Excluding upfront investment from total cost analysis: Fit-out construction, equipment purchases, and a 3–6 month security deposit commonly total 500 million to 2 billion VND. Omitting this from ROI calculations leads to a materially inaccurate view of investment efficiency.
• Failing to budget for expansion when space becomes insufficient: Signing a long-term lease and then needing additional seats 12 months later results in far greater costs, from additional rental or early termination penalties,than selecting a flexible solution from the start.
• Not reviewing annual rent escalation clauses: The majority of traditional office lease contracts include annual rent increases of 5–10%, meaning the cost in year three can be 20–30% higher than in the first year.
• Overlooking hidden costs: Some costs carry real financial value but rarely appear in budget spreadsheets, including staff commute time, recruitment costs attributable to inconvenient office location, and the productivity impact of substandard workspace quality.

What is a reasonable office rental cost? key guidelines for businesses

To keep office rental costs at a sustainable level, businesses can apply the following principles:

• Revenue percentage rule: Total occupancy costs (all-in) should not exceed 5–10% of monthly revenue. This is the most widely used threshold in operational cost management for B2B service businesses.
• Value-contribution rule: If the office address directly contributes to winning contracts or retaining talent, a higher spend level may be entirely justified.

Practical reference benchmarks in Ho Chi Minh City, 2026:

• Safe range for startups and SMEs: 3-7 million VND/person/month (all-inclusive, suited to all-in-one coworking space)
• Typical cost for a Grade B traditional office: 8-15 million VND/person/month
• High-end cost for a Grade A office in city center: 20-40 million VND/person/month

Traditional office vs. all-inclusive coworking space

How Inspire Hub helps businesses optimize office costs in HCMC

If you are looking for an office solution in Ho Chi Minh City that gives you complete cost control, zero hidden charges, and the flexibility to scale at every stage of growth, Inspire Hub is built to solve exactly that challenge.

Located in the Sala Urban Area, Inspire Hub operates on a fully transparent all-inclusive pricing model: a single monthly fee that covers all electricity, water, high-speed internet, cleaning, 24/7 security, pantry tea and snacks, printing support, and a professional admin team, with no variable bills and no surprises.

Delivering office rental cost savings of 40-60% versus a comparable traditional office, Inspire Hub offers a workspace that also provides brand positioning and business networking value well beyond what the monthly fee implies.

>> Read more: What is an office pantry? Roles and standards for a modern workplace

FAQs on office rental costs

Are office rental costs tax-deductible?

Yes. Under Article 4 of Circular 96/2015/TT-BTC, office rental costs qualify as CIT-deductible expenses when three conditions are met: the expense relates to legitimate business operations, valid invoices and documentation are in place, and bank transfer is used for transactions of 20 million VND or more.

Are office rental costs under 100 million VND/year subject to tax?

When renting from an individual whose total rental income does not exceed 100 million VND per year, that individual is exempt from both VAT and Personal Income Tax. The business may still recognize the expense as a deductible cost with a lease agreement, payment records, and an itemized statement, no VAT invoice is required. If rental income exceeds 100 million VND per year, the business is generally required to withhold and remit tax on the individual’s behalf.

Is a 100 million VND/year budget sufficient to rent office space in HCMC?

A budget of 100 million VND per year (approximately 8.3 million VND per month) in Ho Chi Minh City in 2026 can realistically cover:

• Virtual office / Business address registration: From 500,000–2,000,000 VND/month
• Hot desking at a coworking space: Sufficient for 2–3 flexible seats on a month

Do coworking spaces offer lower office rental costs than traditional offices?

Renting at a coworking space delivers substantially lower office rental costs than a traditional office, especially when measured on a true all-in basis. For a team of 15 people, a traditional office in central Ho Chi Minh City can cost 166–180 million VND per month, plus upfront fit-out investment of 500 million to 1.5 billion VND. By contrast, an all-inclusive premium coworking space for the same 15 people costs just 60–90 million VND per month with minimal upfront outlay, representing savings of 40–60% on total annual operating costs, without accounting for additional savings in operational management time and the flexibility to scale.

Ultimately, office rental costs are not just a financial equation, they are a strategic decision that directly affects business growth velocity, talent quality, and competitive positioning. Understanding every cost component, mastering the applicable tax regulations, and selecting the right office model for each stage of growth are the key steps to reducing expenditure without sacrificing the quality of your working environment.

Contact Inspire Hub via hotline 079 777 4 777 or email info@inspirehub.com.vn to receive tailored workspace advice and an optimized office cost solution for your business.