A. Eligibility

A1. What is the eligibility for applying funding support from the Enterprise Support Programme?

Answer:

The eligibility of applicants includes:
a. Registered in Hong Kong under the Business Registration Ordinance (Chapter 310),
b. Non-listed company, and
c. With substantive business operations in Hong Kong.

With substantive business operations means that the applicants have actual operations and business transactions. In consideration of this, reference will be made to a basket of factors in respect of the applicant including type of business operations in Hong Kong, number of employees in Hong Kong, information of customers/ clients and whether profits are tax assessable in Hong Kong. A shell company or an enterprise having most of its main business operations outside Hong Kong will not be regarded as having substantive business operations in Hong Kong.

The applicant has to submit the application form together with relevant documentary proof of substantive business operations in Hong Kong as below:
a. Employees’ records;
b. Financial records;
c. Business transactions/operations information (e.g. business contracts, invoice, shipping documents, records of stock purchased and goods sold etc).

(For details of the above documentary proof, please refer to the Guide to Application.)

 

A2. Are non-listed Hong Kong companies which are subsidiaries of a listed parent company (in or outsider Hong Kong) eligible for applying this funding support?

Answer:

Listed parent company and its non-listed subsidiary companies are separate legal entities. Accordingly, despite the parent company is listed in or outside Hong Kong, its subsidiary companies are eligible for this funding support as long as they are non-listed companies in and outside Hong Kong, registered in Hong Kong under the Business Registration Ordinance (Chapter 310) and have substantive business operations in Hong Kong.

 

A3. Is this funding support open for SMEs only?

Answer:

This funding support is not only open for SMEs. Enterprises which are non-listed companies, registered in Hong Kong under the Business Registration Ordinance (Chapter 310) and having substantive business operations in Hong Kong are eligible for applying this funding support.

A4. What industries are eligible for applying this funding support?

Answer:

There is no limitation on industry sectors for applying the funding support. The projects under applications need to achieve the target of exploring and developing the Mainland market through developing brands, upgrading & restructuring business operations and/or promoting domestic sales in the Mainland.

 

A5. Are enterprises that currently do not have business operations in the Mainland eligible for applying this funding support?

Answer:

Enterprises that do not have business or operations in the Mainland at the time of application are still eligible for applying the funding support provided that they are registered in Hong Kong under the Business Registration Ordinance (Chapter 310), non-listed and having substantive business operations in Hong Kong.

 

A6. Why are listed companies not eligible for this funding programme? Are companies listed on the Growth Enterprise Market (GEM) or foreign trading market eligible for the application?

Answer:

The BUD Fund aims to provide funding support to individual Hong Kong enterprises in undertaking projects to develop brands, upgrade and restructure their business operations and/or promote sales in the Mainland for exploring and developing the Mainland market. As listed companies have more funds raising channels for selection, all the listed companies, including those listed on Hong Kong Main Board and GEM, whether in or outside Hong Kong, are not eligible for the application in order to enable enterprises that have actual needs can benefit from the Programme.

 

A7. If the enterprise company is a listed in the Mainland and has a subsidiary company that is non-listed and registered in Hong Kong, can the subsidiary company apply this funding support for implementing the project for its parent company (listed company) in the Mainland?

Answer:

If the project is implemented for the listed company in the Mainland, since listed companies have more funds raising channels for selection, the applications are not eligible. This can enable more enterprises that have actual needs benefit from the Programme.

 

B. Grant Details

B1. Can the enterprise submit another funding application before the completion of an ongoing project funded by the Programme?

Answer:

The enterprise can submit another funding application before the completion of an ongoing project funded by the Programme, if the total number of projects and the accumulative funding amount approved are less than the corresponding caps (3 approved projects with cumulative funding ceiling of HK$500,000). The applicant is required to provide relevant information of the approved projects (including the project title, approved funding amount and project duration etc.) on the application form.

The enterprise should note that the project progress or performance of the previously approved projects may affect the vetting results of their new applications. The Programme Management Committee will also assess the applications case by case by considering the necessity and capability of the applicant in managing different projects simultaneously.

 

B2. Can eligible enterprises apply for the funding support from the BUD Fund for the ongoing projects that are being undertaken by them?

Answer:

Ongoing projects being undertaken by the enterprise (related to developing brands, upgrading & restructuring business operations and/or promoting domestic sales in the Mainland) will not be funded unless the following criteria are fulfilled:

  • the remaining part (not yet completed) of the project can be conducted as a stand-alone project according to the project scope;
  • the commencement and completion dates of the remaining part of the project can be clearly identified; and
  • the budget for the remaining part of the project can be separately provided and justified.

The applicant has to submit a Holistic Business Plan to demonstrate how the related project will enhance its competitiveness and facilitate its business development in the Mainland market.

 

B3. Can the cost of procuring equipment/ computer software be funded under the Programme? Is there any limitation?

Answer:

If the equipment or computer software procured is essential for project implementation and has specialized use instead of general purpose application, the cost can be funded under this programme (general purpose equipment includes desktop computer, telecommunication equipment and printer etc., whereas general purpose computer software includes operating system, database and word processing software, etc.)

The cost of procuring the equipment/ computer software should not exceed 50% of the total budgeted expenditure of the project.

The total budgeted expenditure should not only include the cost of the equipment /computer software procured. Other supporting services like equipment or computer software testing, technical training, result evaluation and subsequent follow up actions should also be covered in order to ensure effective utilization of the equipment / computer software.

 

B4. Can advertising costs be funded? Is there any limitation?

Answer:

In general, the advertising costs (e.g. newspaper, magazines, television, radio, internet, billboard and poster advertising, etc.) can be funded.

The advertising costs should not exceed 50% of the total budgeted expenditure of the project.

 

B5. Can salary of the existing employees of the enterprise for implementing project related to developing brands, upgrading and restructuring the business operations and/or promoting sales in the Mainland be funded under this Programme?

Answer:

Salary of the existing employees is regarded as the routine operating expenses, so using existing employees to implement the projects will not be funded. If the enterprise needs to establish new positions for implementation of the funded project, the salary of the additional employees in these new positions can be funded.

For the requirements of recruiting additional staff, please refer to the Guide to Application and the Annex: General Guidelines on Staff Recruitment.

 

B6. Can eligible enterprise apply for this funding support for its project completely implemented in Hong Kong?

Answer:

If the project is completely implemented in Hong Kong, the enterprise can apply for this funding support provided that the project will facilitate the enterprise to explore and develop the Mainland market.

The applicant has to submit a Holistic Business Plan to demonstrate how the related project will enhance its competitiveness and facilitate its business development in the Mainland market.

 

B7. Can eligible enterprise apply for this funding support for its project that is completely implemented in the Mainland?

Answer:

The enterprise can apply for funding support for its project that is completely implemented in the Mainland, provided that the applicant meets the eligibility criteria (refer to question A1) and the project under application aims at enhancing the competitiveness of the company in the Mainland through developing brands, upgrading & restructuring business operations and/or promoting domestic sales. The applicant also has to provide evidence showing its relationship with the factory/business premises in the Mainland for project implementation. The evidence includes submission of the following documentary proof:

  • Business Registration Certificate of the Mainland factory/business unit (applicable to Sino-foreign Equity Joint Venture, Co-operative Joint Venture and Wholly-owned Foreign Enterprises): If the investor/shareholder is registered as a company, the company must be the applicant company in Hong Kong. If the investor/shareholder is registered as an individual, the person must be the major shareholder of the applicant company in Hong Kong (with at least 30% share), or
  • Business Registration Certificate of the Mainland factory and the Processing Trade Agreement (applicable to processing trade enterprises): The signing parties of the Processing Trade Agreement must be the applicant company and the Mainland factory in which the project will be implemented.

The enterprise has to submit a Holistic Business Plan to demonstrate how the related project will enhance its competitiveness and facilitate its business development in the Mainland market.

 

B8. What is the application period of the Enterprise Support Programme?

Answer:

Subject to the funding balance, the Enterprise Support Programme will be open for application for five years starting from 25 June 2012.

 

B9. What are the contents requirements of the Holistic Business Plan to be submitted by the applicant?

Answer:

Holistic Business Plan is the medium to long-term development roadmap for the enterprise to develop its Mainland business in the coming 3 to 5 years. The scope must be related to brands development, business operations upgrading & restructuring or domestic sales promotion.

Key points of the contents include:
(a) The threats and opportunities encountered by the enterprise or reasons leading to the intent of developing the Mainland business,
(b) The goals and strategy adopted by the enterprise for developing the Mainland business,
(c) Key initiatives in different phases of the Mainland business development (including the project which is under application), as well as the implementation timelines and responsible parties,
(d) Resources for implementation and the expected results.

 

B10. Can the applicant apply for this funding support for developing and preparing the Holistic Business Plan on its own?

Answer:

The Holistic Business Plan can be prepared and developed by the applicant itself, however the relevant internal expenses for drawing up the Holistic Business Plan will not be funded.

 

B11. Funding will be provided on a matching basis and the applicant has to contribute no less than 50% of the total approved project cost. Can the applicant make use of contribution in-kind to pay for its part?

Answer:

Contribution in-kind is not acceptable. The enterprise has to contribute no less than 50% of the total approved project cost in cash.

 

B12. If an applicant has successfully applied two or more funded projects, is it necessary to open a separate bank account for each of the projects instead of simply opening just one bank account for those funded projects?

Answer:

If the applicant has successfully applied two or more funded projects, it has to open an individual bank account for each project such that the accounts of receipts and expenditures for different funded projects are separated. The accounts are subject to individual financial audits.

 

B13. If different subsidiaries of the same parent company apply for this funding support, will the funding granted for each subsidiary company be separately considered? If the parent company has successfully applied funding supports for three projects or reached the cumulative funding ceiling of HK$500,000, can its subsidiary companies apply for this funding support for other projects?

Answer:

If the parent company and its subsidiaries or different subsidiary companies of the same group are not “related enterprises”, the cumulative funding ceiling of these subsidiary companies can be separately calculated.

Definition of "related enterprises”: Two enterprises with different Hong Kong business registration certificate numbers but having the same individual(s) holding 30% or more ownership of the two enterprises.

The applicant has to provide the information of funding support applications made by its related enterprises in the application form for evaluation. (For details of the required information, please refer to the Guide to Application.)

 

B14. The cumulative funding ceiling of HK$500,000 per enterprise is not a very significant amount since the total expenditure for brand development, business operations upgrading & restructuring and domestic sales promotion can be as high as more than ten millions. Does the funding of HK$500,000 suit the needs of individual enterprises?

Answer:

The objective of the Enterprise Support Programme is to provide funding support to encourage and drive Hong Kong enterprises to capture the opportunities arising from the National 12th Five-Year Plan for exploring and developing their business in the Mainland market.

Funding will be provided on a matching basis and the cumulative funding ceiling per enterprise is HK$500,000. In this regard, each enterprise subsidized by the funding Programme can implement project(s) with total cost of HK$1,000,000. This total project expense of HK$1,000,000 will be good enough for the enterprise, especially SMEs, to formulate new business strategy, start off and test the initiatives for exploring and developing the market in the Mainland.

 

B15. Can the enterprise apply funding supports from the Enterprise Support Programme and at the same time apply other sources of funding support provided by the Government/ the Mainland authorities or other sources of sponsorship/donation for the same project?

Answer:

If a particular project has been/ will be granted from other sources of funding support provided by the Government/ the Mainland authorities or other sources of sponsorship/donation, the project will not be funded under the Enterprise Support Programme.

If the company has applied other sources of funding support provided by the Government/ the Mainland authorities, or other sources of sponsorship/donation for the same project and the application was not approved or it is still under the vetting process, the applicant has to declare the relevant project information in the application form.

 

B16 . What are the obligations and responsibilities of the enterprise when it accepts this funding support?
Answer:

Upon acceptance of this funding support, the enterprise, being the applicant of the funded project, will be responsible for the project implementation and management, observance of the terms in the funding agreement and prudent use of the funding.

If the applicant engages a qualified service provider for preparing the Holistic Business Plan or other consultant(s)/contractor(s) for project implementation, the applicant will also be responsible for the project management.

The applicant has to regularly submit report(s) (includes progress/final report(s)) and audited accounts in accordance with the programme requirements. The enterprise also needs to provide necessary support to facilitate the Programme Secretariat to conduct on-site checking.

The enterprise will be required to share its project experience and results with the industry under this Enterprise Support Programme through participation in promotional activities such as seminars, conferences and exhibitions etc. or contribution of materials for publication.

(For requirements of reports and audited accounts submission (including progress/final report(s)), please refer to the Guide to Application.)

 

C. Project Content

C1. What should the enterprise do if it does not have any idea on the action items needed for brand development, business operations upgrading & restructuring and domestic sales promotion?

Answer:

The enterprise should analyze its current status quo and the opportunities in the Mainland market etc. and then formulate a Holistic Business Plan related to brand development, business operations upgrading & restructuring and/or domestic sales promotion. If the enterprise needs to engage a service provider to develop the Holistic Business Plan, it can apply for this funding support. However, if the Holistic Business Plan is prepared by the enterprise himself, relevant expenses incurred will not be funded.

After developing the Holistic Business Plan, the enterprise should implement the measures (projects) in the Holistic Business Plan stepwise. The expenses incurred in the implementation of the project can be funded under this Programme. (The cumulative funding ceiling per enterprise is HK$500,000).

If the enterprise encounters difficulties in implementing the whole or part of the project, it can engage consultant(s)/contractor(s) for assistance and the related expenses can be funded under this Programme.

 

C2. Can the eligible enterprise apply for the funding support from the BUD Fund (Enterprise Support Programme) to undertake projects to explore the domestic sales through the use of e-commerce platforms (e.g. Tmall.com, previously named as 淘寶商城)?

Answer:

The BUD Fund (Enterprise Support Programme) covers a wide range of scope. The applicant can propose any initiatives, including specific measures using e-commerce platforms for developing brands and/or exploring domestic sales in the Mainland. The applicant has to submit a Holistic Business Plan to demonstrate how the related actions will enhance its competitiveness and facilitate its business development in the Mainland market.

 

D. Service Providers (For Development of the Holistic Business Plan)

D1. Are oversea or Mainland-based service providers eligible for developing the Holistic Business Plan for the enterprises?

Answer:

Those service providers which are not registered in Hong Kong, are not eligible for providing services to the enterprises on developing the Holistic Business Plan. This Programme aims not only to facilitate the Hong Kong enterprises to develop their business in the Mainland through the funding support from the Government but also to benefit the Hong Kong service providers, this in turn will drive the development of related industries in Hong Kong.

The qualified service provider that is engaged by the enterprise can sub-contract part of their work (not more than 50% of the service fee payable to the qualified service provider) to appropriate oversea or Mainland service provider(s) based on the actual needs. There is no eligibility for the service providers that undertake the sub-contracted work.

Besides, if engagement of other consultant(s)/contractor(s)/supplier(s) is/are necessary for the project implementation (other than development of the Holistic Business Plan), e.g. equipment supplier, material supplier, advertising agency, public relations company and product design firm, there will be no eligibility for them and they can be oversea or Mainland companies.

 

D2. What are the ways to identify the qualified service providers for assistance in developing the Holistic Business Plan?

Answer:

The enterprises are free to select qualified service providers for the services needed. In order to facilitate the enterprises to identify the qualified service providers, the Programme Secretariat will compile and maintain a Qualified Service Providers Reference List with information on those qualified service providers of the relevant projects approved under the Programme. The enterprises can download the list from the website of the Programme (www.bud.hkpc.org) for reference (listing the service providers only represents that they were eligible at the time when related projects were approved, it does not imply or guarantee their service levels and competence). When the enterprise decides to employ a service provider, it has to ensure that the service provider possesses the required qualification. (For details, please refer to the Guide to Application.)

The enterprises can also visit the website of HKTDC (www.hktdc.com) to search for relevant information of the service providers for reference.

 

D3. Is it necessary for the enterprise to sign an agreement with the service provider selected for developing the Holistic Business Plan?

Answer:

If the applicant enterprise employs a service provider for developing the Holistic Business Plan, it has to sign an agreement with the service provider to specify the service requirements, contents, implementation schedule, fee and results, etc. so as to guarantee the interests of the enterprise.

The terms and conditions of the agreement should be determined by the enterprise and its selected service provider.

 

D4. Is it necessary for the applicant to select the qualified service provider from the Qualified Service Providers Reference List only?

Answer:

Using the service providers on the Qualified Service Providers Reference List is not necessary. The applicant is free to select other qualified service providers that are not on the list.

Whether the selected service provider is on the list or not, the applicant has to submit relevant information of the service provider for assessment.

 

D5. If the company wants to engage a service provider to draw up the Holistic Business Plan, is it necessary for it to select the service provider by open tendering?

Answer:

The engagement of the service provider for drawing up the Holistic Business Plan or the consultant(s)/contractor(s)/supplier(s) for project implementation must follow the procurement procedures published by the Programme Secretariat.

The enterprise cannot engage service providers/consultants/contractors/suppliers that have conflict of interest with it, e.g. the owners, shareholders or management of them are the owners, shareholders, management or relatives of the applicant. (For the related procurement procedures, please refer to the Guide to Application.)

 

D6. If the enterprise needs to engage a Mainland service provider to provide services for the project implementation, can RMB be used to settle the payment?

Answer:

If the enterprise needs to engage a Mainland company to provide materials or services for project implementation, RMB can be used to settle the payment. However, the related transactions (including the receipts and payments of the project) should be processed under the Hong Kong dollar bank account that is opened according to the requirements of this Programme.

E. Application Procedures and Project Monitoring

E1. Do the approved projects have to be monitored? What are the monitoring measures?

Answer:

In order to ensure effective implementation of the funded project, the enterprise has to comply with the requirements of the Enterprise Support Programme during implementation of the project, including:

  • The applicant has to sign a designated agreement with the Secretariat.
  • The enterprise has to open a separate bank account for processing all receipts and payments of the project, and related statement of income and expenditure has to be audited by the third party.
  • The enterprise has to submit the progress/final report(s) and the audited accounts as required according to the project duration.
  • The Secretariat will arrange consultant(s) to perform on-site checking (approx. one day) for the selected projects in order to monitor the project progress and results.

(For the details of the report(s) and audited accounts submission, please refer to the Guide to Application.)

 

E2. Is the disbursement of fund by the Government guaranteed after the project has been approved? What are the conditions under which the disbursement of fund is withheld/ terminated?

Answer:

The Government has the right to withhold or terminate the disbursement of fund for the approved project under the following situations:

  • The enterprise fails to submit the progress/final report(s) or audited accounts according to the specified requirements and within the stipulated deadlines.
  • The Government is not satisfied with the project progress.
  • The Government has reasons to believe that the chance of project completion is slim.
  • The enterprise breaches the terms in the agreement.
  • The project has to be terminated in consideration of the public interest.

 

E3. What are the criteria for the Secretariat to arrange consultant(s) to conduct on-site checking for monitoring the progress and results of the funded projects?

Answer:

Based on the implementation status and nature of individual projects, the Secretariat will arrange consultant(s) to perform on-site checking (approx. one day) in order to monitor the project progress and results.

The Secretariat will consider the following factors to select projects for on-site checking:

  • The complexity and scale of the project implementation.
  • The quality of the progress/final report(s) submitted by the applicant.
  • The work/results of the project implemented by the applicant and the deviation from the content of the approved project.
  • The amendments made by the applicant during the project implementation
  • The past performance on the project implementation of the applicant or the service provider engaged.

The Secretariat will liaise with the related enterprises and make appointments for the on-site checking.

 

E4 Does the applicant need to submit a separate Holistic Business Plan in addition to the Application Form of the Programme?

Answer:

Content of the Holistic Business Plan is covered by the Section B of the Application Form (4.1-4.6) of the Programme. The applicant only needs to complete the corresponding section of the Application Form and does not need to submit a separate Holistic Business Plan.