Hong Kong Hong Kong has long since been a popular choice for doing business for its robust regulatory framework, abundance of capital and wealth of human capital.
From a business perspective, its position as a global financial hub also grants it unrivalled advantages for fundraising and ammunition to incubate innovation. Hong Kong’s low, simple and competitive tax regime complements these advantages, fostering the free flow of capital in every sense.
The Hong Kong SAR Government has over 40 funding schemes that support the growth and operations of SMEs and startups. The BUD Fund program is one of them.
Which markets can BUD Fund support?
The BUD Fund (“Dedicated Fund on Branding, Upgrading and Domestic Sales”) was firstly launched in 2012 to provide funding support for non-listed Hong Kong companies to implement projects to develop brands, upgrade and restructure their business operations and promote sales in Mainland China.
In the year 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 countries and regions with which Hong Kong has signed Free Trade Agreements, thus creating two independent Programs – the Mainland Programme and the FTA Programme.
BUD is now available for Hong Kong enterprises seeking to undertake development projects in zones 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, Philippines and Myanmar.
• FTA Markets include: the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland), Australia, New Zealand, Chile, Macao and Georgia.
How much expenses will the Fund cover?
The BUD Fund is open to applications all year round, with application’s vetting time set at around 60 working days. Each approved project should be completed within 24 months.
Funding will be provided on a matching basis and the Government will cover a maximum of 50% of the total approved project cost, where the enterprise must contribute no less than 50% of the total approved project cost.
The total cumulative funding ceiling per company under the Mainland and the FTA Programmes is HKD4,000,000 (including audit fee). Companies can choose whether to receive initial payment for their approved project (personal guarantee may be required).
Is there any limit for the application for the Fund?
All non-listed enterprises registered in Hong Kong under the Business Registration Ordinance, with substantive business operations in Hong Kong, are eligible to apply.
Can all expenses be included?
The programme covers three areas of expenses:
• 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 above-mentioned 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 result from the below activities:
- SME Financing Guarantee Scheme
The Scheme aims at helping local small and medium-sized enterprises (“SMEs”) and non-listed enterprises (collectively, “Enterprises”) to obtain financing from participating lenders (“Lenders”) for meeting their business needs so as to enhance their productivity and competitiveness in the rapidly changing business environment.
Under the Scheme, the HKMCI may provide guarantee coverage of 50%, 60% or 70% to the credit facilities of eligible enterprises approved by the Lenders.
- Retail Technology Adoption Assistance Scheme
All non-listed enterprises registered in Hong Kong under the Business Registration Ordinance (Chapter 310) with substantive retail business operations in Hong Kong are eligible to apply, irrespective of their number of outlets.
To provide funding support for retail enterprises to adopt technologies for manpower demand management purposes and help to enhance productivity.
Each funded project should be completed within 6 months.
Funding will be provided on a matching basis, i.e. enterprise will be funded for a maximum of 50% of the total approved project cost. Up to two projects from a single applicant may be approved, subject to the cumulative ceiling of funding support of $50,000.
- Subsidy Scheme for Encouraging Early Deployment of 5G
The Scheme aims to encourage various sectors, through the provision of financial incentives, to deploy 5G technology early to foster innovation and smart city applications, and to improve efficiency of their operations and quality of their services that will contribute to enhancing Hong Kong’s overall competitiveness.
Public and private entities/bodies are welcome to submit applications for projects which are able to bring substantive benefits to the business/sector concerned through the deployment of 5G as well as demonstrate innovation or cross- sectoral synergy.
Under the Scheme, the Government will subsidize 50% of the actual cost directly relevant to the deployment of 5G technology in an approved project, subject to a cap of $500,000. Around 100 qualified projects will be subsidized.
- Technology voucher Programme
Launched in November 2016, TVP aims to support local enterprises/organisations in using technological services and solutions to improve productivity, or upgrade or transform their business processes.
- Re-industrialisation Funding Scheme
Launched in July 2020, RFS aims to subsidise manufacturers to set up new smart production lines in Hong Kong.
Companies incorporated in Hong Kong under the Companies Ordinance (Cap. 622) are eligible to apply.
- Future International Talent Scheme
Commerce and Economic Development Bureau in Hong Kong has launched two internship programmes, namely the Future International Talent (FIT) programme and the Telecommunications Opportunities Programme (TOP) to create 200 full-time, entry-level placements for fresh and recent graduates, in collaboration with 6 international chambers of commerce in Hong Kong and the Hong Kong Federation of Youth Group.
How Can Monx Help?
Monx is an established provider of company registration and outsourced overall corporate services in Hongkong, China, and other Asia countries, providing market entry, legal, accounting, tax, HR, and operational advisory to international investors.
We are committed to providing a seamless service facilitated by technology and delivered by devoted account managers.
We can offer the very best local knowledge to our international clients and provide them with comprehensive introductions to the several local and international banking institutions we’ve had the pleasure of cooperating with within the last decade.