Most foreigners who arrive in Japan think they need a Japanese friend, family member, or employer to co-sign their lease. But that is no longer how the system works.
You can have a traditional individual guarantor (連帯保証人 or rentai hoshōnin), a Japanese citizen or permanent resident who signs the lease alongside the tenant and accepts personal liability if the rent goes unpaid. The second option is a guarantor company, a 保証会社 or hoshou gaisha, that does the same job as a paid corporate service.
In fact, the Ministry of Land, Infrastructure, Transport and Tourism survey of rental management companies for fiscal year 2021 found that 80% of those rentals now use a guarantor company, and 76% use one exclusively, with no individual guarantor at all.
In this article, we’ll explain what each option is, what changed and why, what each costs, who can use which, and how foreign renters get approved when they have no Japanese credit history, no Japanese employer, or a visa that complicates standard screening.
Guarantor vs. Guarantor Company: What’s the Difference?
The individual guarantor has been part of Japanese rental contracts for decades. The guarantor is a Japanese citizen or permanent resident, usually a relative, an employer, or a long-standing friend, who signs the lease alongside the tenant.
If the tenant misses rent, the landlord can pursue the guarantor for payment. If the lease ends with damage to the unit beyond normal wear, the guarantor is on the hook for that too. The role is also unpaid. Whoever takes it on does so as a personal favor or because their employer requires it.
From the landlord’s perspective, the value is enforcement. A Japanese resident with a domestic address and domestic assets is straightforward to collect from. However, the limit is supply, since fewer Japanese friends and family members are willing to take on the role today than a decade ago, and most foreign renters have no one in the country who meets the requirements at all.
The guarantor company does the same job as a paid corporate service. The tenant signs an agreement with the company, the company guarantees the lease to the landlord, and if a rent payment is missed, the company pays the landlord first and then collects from the tenant. The tenant pays for the service, not the landlord.
Guarantor companies typically charge 50% of one month’s rent at signing, plus either a flat renewal fee of around ¥10,000 a year or 10% of monthly rent annually, depending on the company. The company also screens the applicant before approval, which is the part most foreign renters do not anticipate and where most surprises happen.
Both arrangements share a single legal function. Each one gives the landlord a second party to collect from if the tenant defaults.
The practical differences run in five places:
- Cost: An individual guarantor is free at signing. A guarantor company charges 50% of one month’s rent upfront plus a recurring fee for the same coverage.
- Liability ceiling: An individual guarantor’s exposure is now capped in writing under the post-2020 Civil Code, typically at 12 to 24 months of rent. A guarantor company has no statutory ceiling on what it can guarantee, which, from a landlord’s perspective, is the entire point of the shift.
- Screening: An individual guarantor is reviewed by the landlord against simple criteria, such as proof of income and Japanese residency. A guarantor company underwrites the tenant before agreeing to take on the risk, which is why many foreign applicants get rejected.
- Operations: An individual guarantor is reactive, and the landlord has to contact them when something goes wrong. A guarantor company handles direct-debit rent collection, identifies arrears within days, and pursues the tenant through its own collections team.
- Availability: Finding an individual guarantor is hard for foreign renters and increasingly hard for Japanese renters, too. A guarantor company is widely available, easy to onboard, and present on almost every open-market listing.
Can You Choose Your Own Guarantor Company?
Most foreign renters, once they understand what a guarantor company is, want to know how to pick a good one. Guarantor companies vary in cost, screening, and friendliness to foreigners, so the obvious move is to find the best one and apply through that firm.
However, guarantor companies don’t sell their services to tenants. They sell to brokerages and management companies through agency contracts called 代理店契約 or dairiten keiyaku.
Each brokerage or management company holds an agency arrangement with one guarantor company or a small panel of them, and every tenant who applies for a building they handle goes through whichever firm has been assigned to that property. The guarantor company has no direct relationship with the tenant until the management company hands over the application.
This is visible on the bukken sheet (property listing) if you know where to look. The line that says 保証会社加入必須 (guarantor company use required) is the standard one. More telling is the line that names a specific firm, such as 「指定 日本セーフティー」or 「管理会社指定保証会社」. That field decides almost everything for a foreign renter.
For most apartments in Tokyo, the management company or real estate agency you’re working with already has a guarantor company. They’ve signed an agency contract, and their paperwork runs through that firm. You can ask to use a different guarantor company, but the answer is usually no. The narrow exceptions are listings without a specific named firm, smaller landlords who self-manage their properties, and older private buildings that still accept an individual guarantor.
What Guarantor Companies Require from Foreign Renters
Here are the documents you’ll typically need to provide:
- Residence card (在留カード) with enough validity to cover the full lease, usually at least one year remaining and ideally two.
- Passport for identity verification.
- Certificate of employment (在職証明書) from your Japanese employer, or recent payslips covering the last two to three months.
- Tax returns (確定申告書) if you’re self-employed, ideally covering the last two or three years.
- Bank statements showing stable income or savings.
- Personal seal (印鑑) or signature, depending on the company.
The income standard is consistent across most firms. Annual income should run at least 36 times the monthly rent, which works out to rent at no more than one-third of monthly take-home pay.
Most guarantor companies want the residence card to remain valid for the full lease term, usually two years on a standard residential contract. Working Holiday holders, those on Designated Activities visas, and recent arrivals with one-year status often hit this wall regardless of income. The Digital Nomad Visa adds another layer of difficulty because it doesn’t include a residence card or 住民票 (juminhyō), which most guarantor companies require.
Every application also asks for an emergency contact, called 緊急連絡先 in Japanese. The emergency contact must be a person resident in Japan, but they carry no financial liability and don’t sign the lease. Foreigners often confuse this role with that of a personal guarantor. The emergency contact is just someone the landlord can reach if you become unreachable. A coworker or friend in Japan is enough.
Some buildings ask for both a guarantor company and an individual guarantor. This is most common with older private landlords who still distrust corporate guarantees, and with high-end properties whose restoration costs could exceed the guarantor company’s coverage cap. Foreign applicants with limited documentation can also be asked for both, particularly when the management company wants a backup against the risk of visa duration.
Applications get rejected for a handful of predictable reasons. Short visa remaining is the most common, since most firms want the residence card to outlast the lease. Freelance income without two or three years of Japanese tax returns is a close second.
Without a tax history, the company has nothing to verify against. Thin Japanese credit history is a problem with firms that pull credit-bureau data, which catches most newly arrived foreigners regardless of income. Income that just barely meets the 36x threshold can also fail screening, since the company wants some cushion.
What Happens If You Miss Rent?
The guarantor company also handles rent collection. That’s the part renters don’t think about until something goes wrong.
When a direct debit fails, the guarantor company’s collections team calls within days. If the payment isn’t resolved in the same month, the company pays the landlord on your behalf and then pursues you for reimbursement. This subrogated payment is called 代位弁済 (daii bensai) in the contract.
The company can’t change your locks, enter the unit, or end your lease. Until December 2022, some guarantor company contracts included clauses that effectively let them do these things. The Supreme Court ruled against one such firm, Foresees, and voided two specific clauses. One let the company terminate the lease after three months of arrears. The other let them treat the unit as vacated if two months of arrears coincided with the tenant being unreachable and the utilities apparently unused. The court held that a guarantor company is not a party to the lease and cannot bypass the court process to remove a tenant.
What this means in practice is that an unpaid rent month is a debt-collection matter, not an eviction. The landlord still has to file a court action to remove you, which is slow and expensive, and rarely happens for short-term arrears that get resolved.
Credit-reporting consequences depend on which guarantor company is in your contract. Firms that pull credit-bureau data also report defaults to Japan’s main credit bureaus, CIC and JICC, which means a default with either can affect future credit-card applications and loans in Japan.
Independent firms don’t report to credit bureaus, but they maintain internal records and some share rental-default histories with one another through industry associations. A serious default with any of them tends to follow you across the next few applications.
Conclusion
Most properties in Tokyo now require a guarantor company, and the management company has usually already chosen which one you’ll use before you ever see the listing.
If you’re searching to rent an apartment in Tokyo and want help finding buildings where you’ll actually get approved, Tokyo Portfolio works directly with foreign renters. We can match your profile to listings, walk you through the guarantor company step before you apply, and handle the paperwork in both languages. Get in touch to start a search.
