BUD Application Tips

Is it advisable to appoint an intermediary agent to liaise and follow up with the BUD Fund Secretariat on my application?

No.

It would be advisable for the applicants to complete and follow up on the applications so as to acquire in-depth personal understanding of the projects and facilitate more effective follow-up. Applicants are expected to prepare the application on their own and have full knowledge of the applications. It is the responsibility of the applicant itself to complete an application form timely and truthfully, and to provide all supporting documents for the application. The owner/shareholder/director of the applicant may be liable for any misrepresentation, false declarations and omissions, with possible legal consequences and sanctions.

The applicant should assign its staff members as the project coordinator and deputy project coordinator who will act as the main contact points between the applicant and HKPC after the application is lodged and throughout the project implementation period if it is approved. In this regard, the applicant should provide valid and direct contact telephone numbers and email addresses of the project coordinator and deputy project coordinator in the application form.

The project coordinator or the deputy should not delegate the overall project leadership responsibility to any third party. At any stage of application, project implementation and monitoring, HKPC may request to meet, interview and/or visit the project coordinator and/or the deputy in person. An application may be rejected if the project coordinator and/or the deputy cannot be directly reached by the telephone numbers provided; is/are unavailable for or refuse to attend the aforementioned meeting, interview or visit in person without reasonable explanation; and/or cannot address enquiries related to the applicant and the application satisfactorily during these sessions

We offer ample assistance to prospective applicants in drawing up their applications. Firstly, we have provided information online through the Scope of Funding (Summary) and Budget Planning Tool provided by the Application Tips webpage. For more tailored assistance, prospective applicants may access the free one-to-one consultation services of SME ReachOut or the BUD Fund Consultation sessions. During these sessions, officers from HKPC provide assistance to applicants in completing application forms, and offer advice on developing enterprises' business plans relevant to the BUD applications.

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Can I apply for the Fund in order to maintain capital flow for my business in Hong Kong?

No.

Projects facilitating business development in Hong Kong are not eligible for the BUD Fund – only projects developing the Mainland, FTA and/or IPPA markets are eligible. Enterprises in need of extra capital may consider other SME funding schemes.

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I intend to develop my business in the Mainland, FTA and/or IPPA markets, but do not have a specific business plan. Can I apply?

Yes

The majority of applicant enterprises with the intention of developing the Mainland, FTA and/or IPPA markets can simply create projects for application by adjusting their current business plans to fulfil the BUD Fund requirements.

Applicant enterprises unfamiliar with the target markets can submit Type (i) Project Applications to engage qualified service providers to help develop holistic business plans. Refer to paragraphs 1.4 and 2.2 of Guide to Application for details.

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Which markets are covered under the FTA and IPPA Programme?

Effective from 16 November 2024, the markets covered under the FTA and IPPA Programme of the BUD Fund include the ten member states of the Association of Southeast Asian Nations (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam), Australia, Austria, Bahrain, Belgo-Luxembourg Economic Union, Canada, Chile, Denmark, the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), Finland, France, Georgia, Germany, Italy, Japan, Korea, Kuwait, Macao, Mexico, the Netherlands, New Zealand, Peru, Sweden, Türkiye, the United Arab Emirates and the United Kingdom.

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Do I need to own a branch company in the target market to apply?

Not necessarily – depending on the type of industry and details of the project.

In order to meet the BUD Fund application requirements, an applicant enterprise may need to set up a local entity with eligible investment relationship in the target market before implementing project measures and obtaining local business licences/permits.

Enterprises wishing to set up a branch company in their target markets through the BUD Fund may refer to 2.1.3, Annex 3, Annex 4 and Annex 5 of Guide to Application for details.

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Why is the BUD Fund requesting licence/qualification/certification?

Some businesses (such as regulated industries* or those involving sales of products or licensed brand) may require relevant documentary proof (such specific health or safety certificates, licensing/agency agreements, licences, etc.) from the target market in order to operate legally. If relevant licence/qualification/certification is not obtained when submitting application, the project may be considered infeasible and the application would be rejected. In addition, projects will not be funded without documentary proof of relevant licences/qualification/certifications.

Specific examples:

A company has already been selling products on e-commerce platforms in the Mainland, and plans to apply for the BUD Fund for this business. It lacks the relevant licences to demonstrate viability of its online sales, so although the company is already operating the relevant buisness in the target market, they could only be funded after obtaining the licences.
A company plans to export products to a target market. The products need to pass the testing and certification to ensure compliance with the safety standards of the target market before they can be manufactured and sold locally.
A company’s business involves licensed brand product/service. It needs to provide relevant licensing/agency agreement(s) in its application to prove the project’s feasibility.
There are also some scenarios in which applicants do not need relevant licence/qualification/certification as a prerequisite in implementing a project. For example, a company plans to set up a new factory in a target market, and it is confirmed that no documentary proof is required enter the market; the company can simply place their business registration and licence (such as certifications for regulation of food or pharmaceutical products) into their application.

The above examples are non-exhaustive. The latest licence/qualification/certification requirements are subject to the laws of the target market. In case of doubt, please contact the relevant government authorities of the target market.

* Common regulated industries include:food, medical, e-commerce, professional services (such as auditing, financial services, etc.), toys, maternal and infant products, education, publishing, etc.

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Can I apply for a funding of HK$7 million with one single project?

No.

The funding ceiling for each approved general application and “E-commerce Easy” application are HK$800,000, while “Easy BUD” application is HK$100,000. Each enterprise is entitled to a maximum of 70 approved projects, and the cumulative funding ceiling for each enterprise under the BUD Fund is HK$7 million.

Large-scale projects may be broken down into smaller ones for subsequent applications.

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What is the difference between the BUD Fund and other government funding schemes?

The BUD Fund requires applicant enterprises to carry out thorough research of the target market, devise feasible projects, and implement the projects by themselves upon approval.

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Can I opt for initial payment for an “Easy BUD” application?

No.

Initial payment is not applicable for “Easy BUD” application.

You may opt for initial payment if applying for “general application”.

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My company has a valid business registration in Hong Kong. Why is my BUD Fund application rejected?

Some common rejection reasons are listed below:

(a)	The applicant enterprise cannot meet the eligibility criteria, some examples as below: the applicant enterprise cannot provide sufficient documentary proof to demonstrate that its relationship with the local entity established in the target market(s) and involved in the implementation of the proposed project fulfills the requirements under the BUD Fund, the applicant enterprise cannot provide sufficient documentary proof to demonstrate that it has substantive business operations (SBO) in Hong Kong. An enterprise which primarily operates outside of Hong Kong, or is a shell company will not be considered as having SBO in Hong Kong. Besides, if an applicant enterprise engages in sales transactions only with an entity/entities of the same group (consisting the parent and its subsidiary/subsidiaries), such business operations will not be considered as having SBO in Hong Kong.
(b)	The proposed project does not fall within the funding scope of the BUD Fund (e.g. the proposed project is for developing the business of the applicant enterprise in Hong Kong rather than in the FTA/IPPA economies under the BUD Fund’s geographical scope) or “Easy BUD” (e.g. the proposed project would be implemented by the applicant enterprise’s entity established in the target market instead by the applicant enterprise itself) or “E-commerce Easy” (e.g. the proposed project measures are not related to e-commerce)
(c)	Some project measures budgeted under the application are non-fundable and after removing the non-fundable measures, the other budget items seriously depart from the respective budget caps.
(d)	The applicant enterprise cannot show that it has sufficient ability to implement the proposed business in the target market(s) (e.g. the products to be sold or services to be provided are subject to licensing/regulatory requirements in the target market(s) and the applicant enterprise cannot provide documentary proof to demonstrate that it possesses the required licences/qualifications/certifications, or the applicant enterprise does not possess a valid licensing agreement from the licensed brand owner for the products to be sold, or the applicant enterprise cannot demonstrate that it has the capability to upgrade and transform its business.)

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If my project is completely implemented in Hong Kong, can I apply?

Yes, but the applicant enterprise must demonstrate that the business nature is reasonable and the project can be remotely executed.

The applicant enterprise should provide clear justifications and evidence in the application to show that the project is reasonable and feasible, and establish direct relationship between the project and the enterprise’s development and competitive enhancement in the target market.

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Can I hire new employees in Hong Kong to implement the project?

Yes.

Applicant enterprises can hire new employees in Hong Kong or the target market and be funded, as long as they demonstrate in their applications that the additional manpower is directly recruited to implement these projects in full capacity.

The normal operating expenses of an enterprise are outside the scope of funding. If the duties of a new employee include the normal operations (such as daily administrative work, auditing, etc.) of an existing or newly established business unit, the salary of such employee will not be funded.

Refer to 5.2.1, Annex 4, Annex 5 and Annex 7 of Guide to Application for details.

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Can I be funded for the salary of a current employee who is implementing the project?

No.

The salary of existing employees are not within the scope of funding, as they belong to normal operating expenses of the business unit. Only the salary of employee(s) newly recruited for new post(s) established for the purpose of the project would be funded by the BUD Fund.

Refer to 5.2.1, Annex 4, Annex 5 and Annex 7 of Guide to Application for details.

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Certain expenses vary greatly (such as rents in different areas), how should I make accurate estimations?

Applicant enterprises should study the target market thoroughly during the project planning stage, especially on expenditure items that they do not have a clear grasp of. Written documents for cost estimation (such as quotations) should be retained as supporting evidence for application purpose.

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When formulating the budget for a project, can I allow the cost of a specific measure to exceed the percentage cap of the total project expenditure, and bear the excess myself? For example, the upper limit for procurement of machinery is 70% of the total approved project expenditure.

No.

The BUD Fund encourages applicant enterprises to implement a variety of project measures for a more comprehensive development in the target markets. Please make use of the Budget Planning Tool to ensure that your project conforms to the BUD Fund’s budgeting specifications.

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If my product/service is ultimately sold or promoted outside the target market, can I apply for funding?

No.

Projects involving products/services that are ultimately unavailable in the target market will not be funded.

In order to be funded by the BUD Fund, the project must help an enterprise to:
(a) kickstart development in the target market;
(b) enhance competitiveness of their products/services there; and
(c) achieve immediate and long-term development in the target market.

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Do I need to provide a complete business plan?

No.

The online application form already covers the content of a business development plan. Simply fill it in by following the established framework.

Before filling in the form, please make use of the Scope of Funding (Summary) document and Budget Planning Tool spreadsheet provided on the Application Tips webpage to speed up your application process.

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If my project is “unsuccessful” (e.g. project measures not implemented as planned, or failure to develop a product), can I still be funded?

The disbursement of funding depends on whether the project measures detailed in the application form have been fully implemented, and not on an applicant enterprise’s specific business performance or result.

The relevant budgets of unimplemented or partially implemented measures in the project will be deducted proportionate to the degree of implementation; the entire project may not be funded if an important measure is unimplemented such as to prevent other measures from being implemented, or even affect the overall project outcome.

However, a project will not be deemed “unsuccessful” even if the outcome of the implemented project measures differ from the expected result (such as product development failure).

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The offer from the cheapest supplier may be of unsatisfactory quality. How should I manage procurement?

As procurement should follow the lowest price principle, you may invite quotations from suppliers with equivalent quality, avoiding those with significant quality difference.

Refer to paragraph 5.6 of Guide to Application for details.

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What are the specifications of invoices in the Mainland market? How can I confirm that they can be reimbursed?

All reimbursement must adhere to the BUD Fund’s procurement procedures and with corresponding supporting documents provided, such as a sufficient number of quotations, correspondence with service providers, transaction bills and the Mainland VAT invoices, in order to ensure that these expenses comply with the Mainland tax laws.

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The market situation has changed, and the project deviates from the plan during implementation. What should I do?

During implementation, the applicant enterprise must follow strictly the content of the approved project. If the content (such as project duration, budget, project scope, etc.) is changed due to uncontrollable external factors, the enterprise must provide reasons with supporting documents, and obtain written approval by HKPC. If the change is not approved, the enterprise needs to implement the project as originally planned. Refer to paragraph 7.3 of Guide to Application for details.

A small difference between the actual expenditure and the project’s approved budget is allowed, but the percentage cap or upper limit of individual expenditure are still applicable. The enterprise must bear the excess if an actual expenditure exceeds the relevant upper limit. Applicant enterprises are advised to obtain reference quotations during the project planning stage.

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Under what circumstances will the funding of approved projects be suspended/terminated?

The Government reserves the right to withhold or terminate the disbursement of fund for the approved project. Circumstances which warrant suspension or termination of funding support may include but not limited to:
i. The enterprise fails to submit the progress/final report(s), or audited accounts within the stipulated deadlines or produce documentary evidence to the satisfaction of HKPC.
ii. The Government is not satisfied with the project progress.
iii. The Government has reasons to believe that the chance of project completion is slim.
iv. The enterprise breaches the terms and conditions in the agreement.
v. The applicant has engaged or is engaging in acts or activities that are likely to constitute or cause the occurrence of offences endangering national security or which would otherwise be contrary to the interest of national security, the continued provision of funding support for an approved project is contrary to the interest of national security.
vi. The project has to be terminated in consideration of the public interest.

Once a project is suspended or terminated, the applicant will not be entitled to the receipt of Government funding under the Programme and any cost incurred in the project after suspension and termination of Government funding will be solely borne by the applicant himself.

The applicant may have to return all/part of the Government funding disbursed in respect of these projects together with all administrative, legal and other related costs and payments (regardless of whether the applicant has already spent the funds or not).

If an approved project is suspended or terminated and the enterprise has received initial payment or mid-term payment, the enterprise needs to return the disbursed funding. Refer to paragraph 7.4 of Guide to Application for details.

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Mainland Programme FAQ

FTA and IPPA Programme FAQ