Guarantor Companies Explained for Foreign Renters in Japan

If you are a foreigner trying to rent an apartment in Japan, you will almost certainly encounter the term guarantor company (保証会社). For many newcomers, this system is confusing, expensive, and poorly explained—yet it is one of the most important factors in getting approved for housing.

This article explains how guarantor companies work, why landlords require them, and how foreign renters can use them strategically to improve approval chances.

What Is a Guarantor Company in Japan?

A guarantor company is a private firm that guarantees your rent and contract obligations to the landlord if you fail to pay or disappear.

Instead of relying on a Japanese family member as a personal guarantor, landlords shift the risk to a company—for a fee.

For foreigners, guarantor companies are often mandatory, not optional.

Why Japan Relies So Heavily on Guarantors

Japan’s rental system is built on long-term stability and risk avoidance.

Landlords worry about:

• Sudden departure from Japan

• Unpaid rent or utilities

• Difficulty communicating during disputes

• Legal complexity with non-Japanese tenants

Guarantor companies exist to reduce these perceived risks—even when the tenant is financially stable.

Do Foreign Renters Always Need a Guarantor Company?

In practice: yes, in most cases.

Even when listings say “guarantor optional,” landlords often:

• Prefer guarantor company use

• Reject applications without one

• Add it later during screening

Anonymized case:
A European engineer with a high salary applied without a guarantor company because it was listed as optional. The landlord rejected the application. After reapplying with a guarantor company, it was approved.

How Guarantor Companies Work (Step by Step)

1. You apply for an apartment

2. The landlord requires a guarantor company

3. You submit documents to the guarantor company

4. They screen your income, visa, and employment

5. If approved, you pay the guarantor fee

6. The lease is finalized

Approval by the landlord often depends entirely on guarantor approval.

Typical Costs for Guarantor Companies

Costs vary, but common patterns include:

• Initial fee:
  30%–100% of one month’s rent

• Annual renewal:
  ¥10,000–¥20,000 per year

• Monthly fee (some companies):
  1%–2% of rent

This is non-refundable and separate from deposit, key money, and agency fees.

What Documents Foreigners Are Asked to Submit

Guarantor companies usually require:

• Residence card

• Passport

• Employment contract

• Proof of income or offer letter

• Japanese phone number

• Emergency contact in Japan

Some companies reject applicants solely due to visa length.

Common Reasons Guarantor Companies Reject Foreigners

• Short-term visa (student, working holiday)

• Low or unstable income

• Freelance or overseas income

• New job with no payslips

• No emergency contact in Japan

Anonymized case:
A language student was rejected by two guarantor companies due to part-time income limits, even though rent was affordable. A student-focused guarantor later approved the application.

Foreigner-Friendly Guarantor Companies Exist

Not all guarantor companies treat foreign applicants the same.

Foreigner-friendly companies tend to:

• Accept overseas income

• Understand work visa categories

• Offer English support

• Work with international real estate agencies

Real estate agents often choose the guarantor company for you, based on the landlord’s preference.

Can a Company Guarantee You Instead?

Sometimes—but rarely.

• Large Japanese employers may act as guarantors

• Universities sometimes provide alternatives for students

• Most landlords still prefer guarantor companies

Do not assume your employer’s support will replace a guarantor company unless explicitly confirmed.

Is Using a Guarantor Company Risky?

Generally, no—but understand the rules.

If you:

• Miss rent payments

• Break contract terms

• Leave without notice

the guarantor company pays the landlord and then aggressively collects from you.

They have legal authority to pursue repayment.

Tips to Improve Approval as a Foreigner

• Accept the guarantor company without resistance

• Use a foreigner-friendly real estate agent

• Provide documents proactively

• Choose rent well below your income limit

• Avoid short-term leases if possible

Guarantor approval is often the real decision-maker, not the landlord.

Final Thoughts

Guarantor companies are not optional for most foreign renters in Japan—they are a structural requirement. While the system can feel unfair or expensive, understanding how it works dramatically improves your chances of renting successfully.

Foreigners who treat guarantor companies as a strategic step—not an obstacle—are far more likely to get approved.