BUD Application Tips

Do I need to apply via an intermediary agent?

Not needed.

The majority of applicant enterprises can organise their proposed projects and submit applications on their own. The Scope of Funding (Summary) and Budget Planning Tool provided by the Application Tips webpage, as well as the SME ReachOut “form-filling tutor” free consultation services , can help applicant enterprises complete their applications timely.

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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 3 March 2024, the markets covered under FTA and IPPA Programme of the 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, 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 branch company in the target market before implementing specific measures and obtaining business licences/permits locally.

Enterprises wishing to set up a branch company in their target markets through the BUD Fund may refer to 2.1.3, Annex 3 and Annex 4 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 product sales or dealership) may require relevant documentary proof (such as product safety inspection certificate, sales representation agreement, statutory licence, etc.) from the target market in order to operate legally. If relevant licence/qualification/certification is not obtained before submitting application, the project may be considered infeasible and rejected. In addition, projects will not be funded without documentary proof of relevant licence/qualification/certification.

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 brand or product dealership and sales. It needs to provide relevant licence(s) and dealership contract(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, consulting, 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 “Easy BUD” application are HK$1 million and HK$100,000 respectively. Each enterprise is entitled to a maximum of 70 approved projects, and the cumulative funding ceiling for each enterprise 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.

The BUD Fund hopes to help SMEs expand in their target markets with their own capabilities, while the majority of other funding schemes allow outsourcing project implementation to third parties.

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

Yes, but more difficult – 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 Annex 5 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. Additional manpower directly recruited for the project can be funded by the BUD Fund, but the applicant enterprise must declare that such additional manpower is recruited for implementing the project.

Refer to 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 5.7 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 Mainland VAT invoices, in order to ensure that these expenses comply with 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 has the right to suspend or terminate funding support for an approved project under the following circumstances:
(a) the enterprise fails to submit progress/final reports or audited accounts within the stipulated deadlines;
(b) the Project Management Committee and the Government note a lack of satisfactory progress of the project;
(c) the Project Management Committee and the Government believe the chance of completing the project is slim;
(d) the enterprise has breached the terms and conditions of the funding agreement; or
(e) the project should be terminated in public interest.

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