Japan's M&A Subsidy Closes on 6 November. A New Acquisition Company Can't Apply

Japan's main subsidy for the cost of buying or selling a small business is taking applications until 17:00 Japan time on Friday 6 November 2026. The 16th round of the Business Succession and M&A Subsidy (事業承継・M&A補助金) opened on 2 October, after the guidelines were published on 4 September. It can repay up to two-thirds of an acquirer's advisory and due-diligence fees. Before a foreign buyer counts on that money, one rule matters more than any other. A company must already have three completed and filed fiscal years behind it to apply. A company formed to make the acquisition does not qualify.

What it pays. This round has four tracks. Two of them can fit an outside buyer. The figures below come from the round's official guidelines (公募要領) for the expert-fees track and the secretariat's overview pamphlet.

• Expert fees, buyer side (専門家活用枠・買い手支援類型). Covers fees for a financial adviser (FA) or intermediary, valuation, due diligence (DD, the buyer's investigation of the target) and similar costs, at up to two-thirds. It can also cover fees for matching platforms and the premium for warranty-and-indemnity insurance arranged by the buyer. The cap is ¥6 million, plus another ¥2 million for DD. Buyers must carry out DD whether or not they claim for it. If the deal has not closed by the end of the project period, the cap drops to ¥3 million and, in principle, only DD costs count. The smallest grant is ¥500,000.
• A larger buyer-side version (100億企業特例). The cap rises to ¥20 million, paid at one-half on the first ¥10 million and one-third above that. It is only open to companies that have publicly declared a goal of ¥10 billion in annual sales. The price paid to the seller must be at least ¥500 million, and the buyer must keep the seller's employees for three years.
• Post-merger integration (PMI推進枠). Integration advice is covered at one-half, up to ¥1.5 million. Integration investment, such as equipment to combine operations, is covered up to ¥8 million (¥10 million with a qualifying pay rise), at one-half, or two-thirds for small businesses. The final agreement must be signed by the time of the grant application, and the work must take place within three years of closing.

Sellers can claim too. The seller-side track repays one-half of the seller's own fees on the same caps, or two-thirds if its margins have fallen or it made a loss. A small-seller version pays up to ¥4.5 million. The other two tracks, for family or employee successions and for closure costs, rarely fit an outside buyer.

Who can apply: the part foreign buyers miss. The expert-fees guidelines (section 5) set the tests. The same basic tests apply in the integration track.

• Based in Japan. The applicant must have a base in Japan and do business in Japan.
• Three years of filed accounts. A company must be registered and have completed and filed three fiscal years of accounts and tax returns when it applies. A new acquisition company (often called a BidCo) fails this test.
• SME size limits. For example, a manufacturer must have capital of ¥300 million or less or 300 employees or fewer. For services the limits are ¥50 million or 100 employees.
• No large-company control. An applicant is out if one large company owns half or more of it, if large companies together own two-thirds or more, or if large-company staff fill half its board. A foreign company counts as large if both its capital and its headcount exceed the SME limits. The carve-outs for investors are Japanese vehicles, such as investment limited partnerships set up under Japanese law (投資事業有限責任組合).
• One applicant per group. A parent and the subsidiaries it controls by majority vote count as a single applicant.

In practice, the buyer side fits a foreign-owned Japanese company that has operated for three or more years, passes the size and ownership tests, and is buying an add-on business. It does not fit a fund or a search-fund buyer acquiring through a newly formed company. As our platform landscape guide puts it, these programs mostly serve domestic parties. Your Japanese advisers should still check, because the money is real at small-deal scale.

Timing rules that sink claims.

• Sign advisers after the grant decision. Costs count only if they are contracted and paid within the project period, which starts with the grant decision (交付決定). The pamphlet plans selection results for late December 2026 and grant decisions from late January 2027. The project period then runs for up to 14 months. An FA engagement signed in November is not covered. Success fees tied to a final agreement signed before the period starts do not count either, and a memo that moves the signing date does not fix that.
• Registered advisers only. FA and intermediary fees count only if the firm is on the SME Agency's M&A support register (M&A支援機関登録制度). Registration is checked at the grant decision.
• Get the ID now. Applications go through jGrants and need a GbizID Prime account. SMRJ says getting one takes about two to three weeks; the secretariat's application page says one to two. If you don't have one yet, time is very tight.
• File by 29 October. Applications bunch up on the last day or two, the secretariat says. Late filings may not get more than one chance to fix errors, and an application that still has errors can be rejected. It recommends filing by 29 October, five business days before the deadline.
• Paid help must be licensed. Only an administrative scrivener (gyoseishoshi, 行政書士) may be paid to prepare the application for you.
• Cash first, grant later. The grant reimburses costs already paid, after the project ends and the costs are checked. Fund the full fees yourself first.

How selective is it? In the 15th round, announced on 11 September, 338 of 551 applications were accepted (61%). On the expert-fees track it was 194 of 312. Build the deal so it works without the grant, and treat any award as a partial refund of adviser and integration costs.

What this does not change. Foreign investment screening (FEFTA), release of the seller's personal guarantee and visa planning run on their own timelines (see our FEFTA and visas guide). Nor does the subsidy change where deals come from. Regional banks and tax accountants still matter more for deal flow.

A dated checklist. Confirm the applying company has three filed fiscal years and passes the size and ownership tests. Apply for GbizID Prime today if you don't have it. Choose an FA or intermediary from the register. Don't sign adviser contracts until the grant decision. Aim to file by 29 October; the hard stop is 6 November at 17:00 Japan time. The secretariat's recorded briefing on the round (in Japanese, registration required) is available until the same deadline.