HK Government supports companies entering Mainland China and South East Asia
The BUD Fund (“Dedicated Fund on Branding, Upgrading and Domestic Sales”) was first launched in 2012 to provide funding support for non-listed Hong Kong enterprises to undertake projects to develop brands, upgrade and restructure their business operations and promote sales in Mainland China.
The BUD Fund
Between 2018 and 2020, the Hong Kong Government decided to further extend its geographical scope to include the Association of Southeast Asian Nations (ASEAN) and all economies with which Hong Kong has signed Free Trade Agreements, thus creating two parallel Programmes - namely the Mainland Programme and the FTA Programme.
BUD is now available for Hong Kong companies looking to undertake development projects in countries that have signed a Free Trade Agreement with Hong Kong, and ASEAN markets including (in addition to the “Mainland Programme”):
- ASEAN Markets include: Singapore, Thailand, Indonesia, Brunei, Malaysia, Cambodia, Laos, Vietnam, the Philippines and Myanmar.
- FTA Markets include: the four member states of the European Free Trade Association (i.e. Iceland, Liechtenstein, Norway and Switzerland), Australia, New Zealand, Chile, Macao and Georgia.
- In the Hong Kong Budget 2021-22 released in February 2021, the BUD Fund’s geographical coverage has been increased to a total of 37 countries including all economies which have entered into an FTA with Hong Kong or signed Investment Promotion and Protection Agreements: Austria, Belgium, Luxembourg, Canada, Denmark, Finland, France, Germany, Italy, Japan, Republic of Korea, Kuwait, Netherlands, Sweden, UAE, UK, Mexico, Mainland China, New Zealand, Chile, Macao, Iceland, Liechtenstein, Norway, Switzerland, Indonesia, Thailand, Singapore, Malaysia, Philippines, Vietnam, Myanmar, Brunei, Cambodia, Laos, Georgia, Australia.
The BUD Fund is open to application all year round. The application’s vetting time is set at 60 working days (tentative) from the date of receipt of a complete application accompanied by all necessary documentation proof and clarifications as requested by the Hong Kong Productivity Council (the BUD Fund Implementer). Each approved project should be completed within 24 months.
Funding will be provided on a matching basis, i.e. the Government will cover a maximum of 50% of the total approved project cost, where the enterprise has to contribute no less than 50% of the total approved project cost. The total cumulative funding ceiling per enterprise under the Mainland and the FTA Programmes is HKD7,000,000 (including audit fee) and the maximum number of approved projects per enterprise has been increased to 70 with effect from 7 November 2022. Applicants can choose whether to receive initial payment for their approved project (personal guarantee may be required).
All non-listed enterprises registered in Hong Kong under the Business Registration Ordinance, with substantive business operations in Hong Kong, are eligible to apply.
The programme covers three areas:
- Branding - brand strategy, brand building, brand promotion, brand management
- Upgrading and restructuring - new product design, adoption of advanced technology, management and logistics system upgrading, manufacturing automation
- Domestic sales – strategic planning, sales business operation management, channel management, team formation and management
The BUD fund can cover business expenses related to developing your business in the specific markets. They can include staff costs with a maximum of up to 50%), new business set up costs (maximum of up to 20% of funding), as well as costs resulting from the below activities.
Expenses that can be covered by the Hong Kong Government's BUD fund:
- Business registration
- Additional manpower
- Branding and marketing related activities, trademark registration
- New product development, prototyping, patent registration
- Additional machinery and equipment
- Establishing sales channels, setting up ecommerce platforms, and
- Product testing and certification
Project Monitoring and Reporting requirements
Projects with a duration of over 18 months are required to submit a Progress Report and Annual Audited Accounts covering the first twelve months. The Progress Report should include a summary of the project progress against the project implementation plan set out in the Approved Project Proposal appended to the funding agreement as well as a statement of income and expenditure for the reporting period. Both projects that are 18 months or below or more than 18 months to up to 24 months, need to submit a Final Report and Final Audited Accounts.
If you would like to know more about BUD Fund, or require assistance in applying for it, talk to our team today.