📖 Approx. 7 min read ／ Updated 2026.05.08
The Rise of Clinic Sales and Transfers and Its Background
In recent years, the sale and transfer of clinics, particularly for the purpose of business succession through M&A, has seen a rapid increase. This trend is driven by a complex interplay of factors, including the aging of private practitioners, a lack of successors, changing aspirations among employed physicians to practice independently, and a growing interest in stabilizing management and expanding to multiple locations through incorporation as a medical corporation. Many clinic directors, considering their own health and retirement timelines, are choosing to pass on their long-established medical practices to new owners who can continue serving the staff and patients, rather than closing them down. M&A Medical frequently receives consultations from those with the earnest desire to see their clinic handed over to someone else rather than cease operations. This article, from the perspective of medical M&A specialists, will explain the typical market prices for transfers, the specific procedures involved, and crucial points to consider for medical corporation directors, clinic presidents considering a sale, and tax accountants and CPAs looking to support their clients.
How Clinic Transfer Prices Are Determined and Market Trends
The transfer price of a clinic is not determined by a single factor but is a result of complex interactions among multiple elements. Generally, the transfer price tends to be evaluated as the sum of the following three components:
Components of Transfer Price
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1. Net Asset Value
The market value of assets such as medical equipment, interior furnishings, facilities, inventory, and cash/deposits. Liabilities (loans, etc.) are deducted. -
2. Business Goodwill (Noren)
The value of intangible assets, such as the clinic’s profitability, brand strength, patient base, and location, which cannot be measured by net assets alone. This is often calculated by multiplying EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by a certain multiple (typically around 2 to 5 times). -
3. Unique Value (Premium)
An additional value attributed to the clinic’s unique strengths and future potential, such as rarity within a specific medical specialty, strong local brand recognition, specialized medical equipment, excellent staff composition, or IT assets like electronic health record and appointment systems.
Because these factors are evaluated comprehensively, the transfer price can vary significantly depending on the clinic’s size, specialty, location, profitability, and future prospects. Below are indicative ranges for transfer prices by major medical specialty, based on M&A Medical’s support experience. Please note that these are general trends and can differ greatly depending on the specific circumstances of each clinic.
| Specialty | Estimated Annual Revenue | Indicative Transfer Price Range |
|---|---|---|
| Internal Medicine | 100-300 Million Yen | 30-150 Million Yen |
| Orthopedics | 150-400 Million Yen | 50-200 Million Yen |
| Dermatology | 80-200 Million Yen | 20-100 Million Yen |
| Ophthalmology | 100-300 Million Yen | 30-150 Million Yen |
| Dentistry | 50-200 Million Yen | 15-80 Million Yen |
| Cosmetic Medicine (Primarily Fee-for-Service) | 50-1000 Million Yen | 30-500+ Million Yen |
The cosmetic medicine sector, in particular, tends to have a wider range of transfer prices due to the high proportion of fee-for-service treatments and the significant impact of brand strength and marketing strategies on pricing. Furthermore, when a medical corporation operates multiple clinics, the entire corporation may be sold or its business transferred, rather than individual clinics. In such cases, the tax treatment of the corporation, the valuation of equity interests, and procedures for changing shareholders become more complex.
Basic Procedure for Clinic Sales and Transfers
Selling or transferring a clinic is a process that requires specialized knowledge and experience. It generally proceeds in the following steps. From the signing of a Non-Disclosure Agreement (NDA) to the final contract and closing, the process can take as little as a few months or as long as over a year. Support from specialists (M&A intermediaries, lawyers, tax accountants, etc.) is essential at each stage.
Step-by-Step Flow for Clinic Sales and Transfers
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1
Consultation and Preparation Stage
Consultation with an M&A intermediary, clarification of sale intentions, preparation of documents (financial statements, treatment records, equipment lists, etc.).
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2
Initial Negotiation and Non-Disclosure Agreement (NDA)
Meeting with potential buyers, overview of the clinic, signing of a Non-Disclosure Agreement (NDA).
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3
Due Diligence (DD)
Detailed investigation by the potential buyer (financial, legal, operational, licensing, etc.).
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4
Letter of Intent (LOI) and Condition Negotiation
Based on DD results, final adjustments to transfer price, transfer scheme, and handover conditions. Signing of a Letter of Intent (LOI).
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5
Signing of Final Agreement
Signing of the Sale and Purchase Agreement (SPA). For medical institution M&A, the agreement also covers the transfer of medical fee receivables, employment of staff, and handling of patient information.
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6
Closing and Handover
In accordance with the agreement, payment of consideration, transfer of assets and rights, procedures for changing licenses and permits, notification to staff and patients, etc.
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Important Considerations for Clinic Sales and Transfers
Selling or transferring a clinic goes beyond a simple business transaction; it requires careful consideration of the unique aspects of a medical institution. The following points are particularly important:
1. Transfer of Licenses and Permits
The clinic’s establishment permit, various notifications, and designation as an insured medical institution generally need to be transferred from the seller (current director) to the buyer (new director). This involves procedures with the regional bureaus of health and welfare and public health centers. Specifically, the transfer of medical fee receivables and the compliance with facility standards are crucial considerations for potential buyers. The ability of the buyer to smoothly obtain these permits, or the seller’s ability to support a seamless transfer, can significantly impact the success of the M&A.
2. Handling of Staff and Patients
While requests to proceed without staff or patients knowing are common, complete confidentiality is often difficult to maintain. As the M&A process progresses and nears final agreement, explanations to stakeholders become necessary. Depending on the timing and content of these explanations, it can lead to staff resignations or patient anxiety. Therefore, it is crucial to collaborate with M&A intermediaries and specialists to develop a phased and careful communication plan. For example, staff might be informed after the M&A is finalized, and patients should be reassured about the continuity of care.
3. Differences Between Medical Corporations and Private Practitioners
The procedures and tax implications differ significantly between selling a clinic operated by a private practitioner and selling a medical corporation.
Key Differences in Sales: Private Practitioner vs. Medical Corporation
| Item | Private Practitioner | Medical Corporation |
|---|---|---|
| Subject of Transfer | Business (clinic assets, patient list, goodwill, etc.) | The corporation itself (equity transfer) or business transfer |
| Taxation | Capital gains tax (separate taxation) | Capital gains tax on equity valuation, or corporate tax/consumption tax |
| Procedures | Relatively simple | Shareholder meeting resolutions, shareholder change procedures, fund contributions/repayments, etc., are complex |
| Licenses and Permits | Changes to establishment permit, insurance designation, etc. | Corporate registration changes, shareholder/director changes, license transfer |
For medical corporations, changes in shareholders (equity holders) and the handling of funds (those with repayment obligations) require particularly careful consideration. It is also necessary to consult with tax accountants to determine eligibility for business succession tax systems. Many owners who have benefited from the advantages of operating as a medical corporation ultimately choose a business transfer due to concerns about future corporate tax burdens and operational complexity.
4. Capital Gains Tax and Tax Strategy
Capital gains tax is generally levied on the profits realized from the sale of a clinic. For private practitioners, it is treated as the sale of business assets and is subject to separate taxation from regular income. The tax rate varies depending on factors such as the holding period but is typically around 20% (including income tax, resident tax, and reconstruction special income tax). When equity interests in a medical corporation are transferred, it is also generally taxed as capital gains. However, unlike calculations for inheritance or gift tax, determining the transfer value for a medical corporation can be complex.
The tax implications can vary significantly depending on the M&A structure (e.g., business transfer, stock transfer, equity transfer). Therefore, it is extremely important to consult with a tax accountant early on to develop an optimal tax strategy, including tax-saving measures. For instance, utilizing deductions such as the Small Business Mutual Aid Plan contributions or special provisions under the Act on Facilitating Succession of Small and Medium-sized Enterprises (Small Business Succession Act) may be considered.
5. Impact of Medical Fee Revisions and Facility Standards
Clinic revenues are directly affected by revisions to medical fees. Understanding the details of recent revisions and future trends in fee structures is essential for valuing the clinic and negotiating with potential buyers. Additionally, facility standards that must be met for each specialty and the adoption of advanced medical equipment influence the clinic’s competitiveness and valuation. Whether potential buyers can maintain or improve these standards is also a key factor in their M&A decision.
Conclusion: Proceeding with Clinic Succession with Experts
Selling or transferring a clinic is a highly meaningful option that allows a director’s long-standing contributions to be passed on to the next generation. However, the process is complex and involves numerous issues unique to medical institutions. Calculating the transfer price, selecting appropriate buyers, navigating legal and tax matters, and considering stakeholders all require specialized knowledge and experience. At M&A Medical, our team of experts, well-versed in the medical industry, proposes optimal M&A strategies tailored to each client’s situation and supports smooth business succession. Please feel free to consult with us.
Consult M&A Medical for Medical Succession Support
M&A Medical is a specialized M&A and business succession support service for medical institutions. As an M&A support institution certified by the Small and Medium Enterprise Agency, we support the successful transfer of clinics and medical corporations facing succession issues, as well as strategic acquisitions, on a success-fee basis.
- Initial consultation and preliminary appraisal are free
- No upfront fees or monthly charges (success fee only)
- Strict confidentiality (proceeds after signing NDA)
- Support available nationwide across all 47 prefectures and all medical specialties
Please consult us early, even if you are just considering options such as wanting to know the market price, lacking a successor, or considering joining a group.