Japan Puts a Law for SME M&A Advisers on the Table: A Licence for People, Certification for Firms

On 28 October we wrote that Japan plans an exam and a public register for the people who broker and advise on small-company sales. The next day the government went further. At the first meeting of a new subcommittee of the SME Policy Council (中小企業政策審議会), the SME Agency proposed legislating two systems side by side: a national qualification for individual advisers, and certification for the firms they work for, backed by government powers to collect reports, order improvements and revoke certification. The secretariat's paper asks members to reach conclusions on the core design within the year. For a foreign buyer, it could be the biggest change to Japan's small-company M&A market since the adviser register opened in 2021.

Join the buyer register

What happened. The SME M&A and Business Succession Subcommittee (中小M&A・事業承継小委員会) met for the first time on 29 October 2026 at the economy ministry in Tokyo, chaired by Masahiro Yamamoto of Meiji University. Its members include tax accountants, lawyers, academics, a manufacturer's chief executive and a vice-president of Rengo, Japan's main trade union federation. Observers include the Japan Finance Corporation, the main bank associations, the bar and tax accountant federations, the two M&A industry associations and the Financial Services Agency. The setup paper says support for business succession is at "a major turning point". Support should not just keep businesses going but focus on companies that grow after a handover. It describes M&A as something owners should use strategically to grow, not only when there is no successor.

What the SME Agency proposed. The paper sets out ten points "to conclude within the year, aiming at legislation". Each is phrased as a question for members (〜してはどうか, "how about…"), so none is final. Grouped, they are:

• A national qualification for people. An exam to check the knowledge and ethics needed for M&A support work, with those who pass entered on a register. The level would be the basics anyone doing M&A work should already have.
• A protected title, renewed over time. The qualification would be name-exclusive (名称独占): only registered people could use the title. That restricts the title, not the work itself. Registration would be renewable, with continuing training, and could be cancelled and made public after misconduct.
• Certification for firms. A firm-level certification (認証/認定) that only certified firms could claim or display. Requirements would include having qualified staff and proper operating systems, and certified firms would have to follow government guidelines based on the current SME M&A Guideline.
• Real enforcement powers. The government would be able to collect reports from certified firms, order improvements and revoke certification.

Two further points are left "to keep discussing after the new year": whether to add or change rules, including on fees and on stronger duties to explain the advisory contract and the final agreement, and what else is needed, such as raising owners' understanding of M&A.

Why the current register is not enough. About 3,400 support firms, including about 1,200 specialist brokers and financial advisers, had joined the SME Agency's register of M&A support firms by March 2026. The paper is blunt about its limits. Registration requires only a declaration that a firm follows the guideline. It does not require internal rules or operating systems, so how firms actually work is "not necessarily assured". When the SME Agency looks into reports, "cooperation with investigations is voluntary, with no compulsion". Interviews with firms that were the subject of reports in fiscal 2025 and 2026 describe deals handled by about two people, a setup the paper says turns up in a number of cases, and staff who are "basically inexperienced", coming from finance, real estate, recruitment, advertising and other industries. One firm said its sales staff were almost all mid-career hires with no M&A experience.

The complaints have not gone away. The register's information desk received 126 reports about M&A support firms in fiscal 2024 and 87 in fiscal 2025: 51 about sales tactics and 36 about other matters. Last week's brief quoted 80 for fiscal 2025, counted to February 2026. The 29 October paper gives the full year.

The market is still growing. Registered private M&A support firms reported 5,236 completed small-company deals in fiscal 2025 (April 2025 to March 2026), up 54% from 3,403 in fiscal 2021. The government's business succession support centres added 2,265 more.

The timetable. The paper plans three meetings. The second will continue the discussion and look at a draft outline of the law. The third will settle "the direction for legislation". From next year the subcommittee expects to also take up succession within families and to employees. The paper itself gives no date for a bill. The Yomiuri Shimbun reported on 29 October that the government aims to finish the discussion within the year and submit a bill to next year's ordinary Diet session, and that penalties are being considered. Treat that as a reported aim until a bill appears.

The direction already has political cover. The government's June 2026 strategy to strengthen mid-sized and small companies' earning power lists a qualification for SME M&A advisers and a review of the register, "aiming at legislation". The Japan Growth Strategy (日本成長戦略), approved by the Cabinet on 21 July 2026, calls for a qualification for individuals and legislation to make the register more trustworthy.

The exam is not the licence. One point corrects how the plan looked a week ago. The SME Agency still plans to start its SME M&A practical skills and ethics test (中小企業M&A実務能力・倫理検定) this fiscal year, in the format we described last week: four subjects, about 60 questions, 120 minutes on computer. The paper now spells out that this test, which earlier panels called the "SME M&A qualification exam", is a separate system from the statutory qualification. Passing it "does not automatically mean" holding the future qualification, and how passers are treated will be settled as the law is designed. The pass mark is expected to be about 70–80% overall, with a minimum score in each subject. For the ethics paper, the SME Agency is considering answers that fail a candidate outright.

The Kansai angle. Japan's specialist M&A advisers are concentrated in three big metro areas. Of full-time M&A staff at registered firms in August 2026, 61% were in greater Tokyo, 13% in greater Osaka and 5% in the Chukyo area around Nagoya, leaving about 21% for the rest of the country. Kansai has a real adviser market, but it is about a fifth the size of Tokyo's. Our 28 October brief has the prefecture counts for Osaka, Kyoto and Hyogo. Our reading: a certified-firm label and a protected title would give Kansai owners, who have fewer specialists to choose from, an easier way to tell them apart. The paper does not say whether certification would replace registration as the condition for the government subsidy on adviser fees.

What it means for a foreign buyer. We read it four ways:

1. The sell side gets more accountable. If the proposals become law, a certified firm will have to have qualified people and proper systems, and the government will be able to demand reports and order fixes. That should mean fewer surprises from brokers who pushed an owner into a deal they did not understand.
2. The checks on buyers stay. The current guideline already asks advisers to look into the buyer and report to their client. If the proposals are adopted, certified firms would follow guidelines with enforcement behind them. Expect questions about your funding, your plans for staff, and taking over the owner's personal guarantees.
3. Titles will matter, not just firm names. Ask which person is running the deal on the seller's side and whether they will hold the new qualification. Until a law passes, check the firm against the current register and ask how it handles conflicts of interest when it acts for both sides.
4. Fees are still open. Fee rules and stronger duties to explain contracts are on the agenda after the new year. Nothing has been proposed on fee levels. If you are negotiating now, ask in writing how the seller's adviser is paid.

Nothing here changes how a deal works today. The law is a proposal, the exam is not a licence, and the details will come from the next two meetings. We will report the draft outline when the SME Agency publishes it.

Join the Keisho X buyer register