Introduction to the BUD Fund
What is the BUD Fund?
The BUD (Branding, Upgrading, and Domestic Sales) Fund scheme is to support individual Hong Kong enterprises in undertaking projects to develop brands, upgrade and restructure their business operations and promote sales in the Mainland and economies with which Hong Kong has signed Free Trade Agreements (FTAs) and Investment Promotion and Protection Agreements (IPPAs).
- In a nutshell, the BUD Fund is suitable for an “exporting” purpose – targeting one (or many) of the jurisdictions in the scope of FTA and IPPA to actively market and sell the enterprise’s products and services.
Access more general info here: https://fta.bud.hkpc.org/en
View BUD’s Guide to Application here: https://fta.bud.hkpc.org/en/content/application/
Link to HKPC’s Tips for Application: https://fta.bud.hkpc.org/en/content/cases-dissemination
Eligibility
- Applicant: All non-listed enterprises registered in Hong Kong, those with documentary evidence proving its substantive business operations in Hong Kong at the time of application.
- Jurisdictions in Scope: With effect from February 14, 2022, the BUD Fund “FTA and IPPA Programme” covers applications for undertaking projects to develop the markets of ASEAN (i.e. Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam), Australia, Chile, the four member-states of the European Free Trade Association (i.e. Iceland, Liechtenstein, Norway, and Switzerland), Georgia, Macao, New Zealand, Austria, Belgo-Luxembourg Economic Union, Canada, Denmark, Finland, France, Germany, Italy, Japan, Korea, Mexico, the Netherlands, Sweden, and the United Kingdom.
- Project Scope: The BUD Fund has two types of funding scheme:
- Type (I) Developing a holistic business plan: Projects that involve the engagement of qualified service providers by the applicants to develop holistic business plans in the areas of branding, upgrading and restructuring, and/or promoting sales for the applicants to enhance their competitiveness and facilitate their business development in the FTA Markets – in a nutshell, funding for consultation service.
- Type (ii) Implementation of specific measures: Under Type (ii), there are three scopes of measures as shown below. One project can include multiple areas.
- Note that there may be constraints depending on the types of measure you apply for, for example, if your project is ONLY on Upgrading & Restructuring, you need to have a registered legal entity in the targeting FTA jurisdiction.
Key Facts on the Funding Scheme
- Funding on 50:50 matching basis (BUD Fund supports up to 50% of the budget, and no less than 50% should be contributed by the enterprise)
- The government will provide full funding support for the audit fee of the approved project, capped at HK$10,000 per audit which will be counted towards the cumulative funding ceiling per enterprise.
- The cumulative funding ceiling per enterprise under the Mainland and the FTA and IPPA Programmes is HK$7,000,000 (including audit fee – last updated in Nov 2022), while the funding ceiling for each approved project is HK$1,000,000 (including audit fee).
- One enterprise can submit multiple concurrent applications for multiple projects, but the projects cannot overlap with other government-funded projects (e.g. TVP) and all projects have to be new (not commenced) ones.
- During the tenure of the Programme, funding support will be granted to each enterprise for a maximum of sixty approved projects (both Mainland Programme and FTA and IPPA Programme included).
- Project Duration: 24 months maximum
- Fund disbursement: You can opt-in for Initial Payment (75% of the approved funding, as of Mar 2022) or Reimbursement basis for the disbursement of funds.
Preparing for Application
Application & Vetting Process
- Application is open all year round, on a rolling basis.
- Under normal circumstances, HKPC, upon consulting IDC and PMC on the assessments, will complete the processing of a valid application within 60 clear working days from the date of receipt of a complete application accompanied by all necessary documentation proof and clarifications as requested by HKPC.
- However, based on experience, do note that the back and forth process with HKPC to submit the “complete application” with all the necessary documentation proof can easily take 4-6 months.
Tips & Best Practices
- Thoroughly read the Guide to Application to learn the eligible expenses and non-eligible expenses. For example, there are funding constraints on some budget items as below:
- Advertising costs cannot exceed 50% of the whole funding
- Existing staff salary cannot be funded. We can hire new staff for the project purpose only. Direct hire salary cannot exceed 50% of the whole funding
- Other caps exist on website building, mobile applications, etc.
- Make sure you read the application thoroughly to assess your project’s applicability from your perspective and judgment.
- Once you have a good idea of your proposal, draft up the application form and try to book a consultation with HKPC.
- Call, or write a concise email to: (852) 2788 6088, bud_sec@hkpc.org to briefly explain your proposal and your main budget plans to double confirm the eligibility.
- When you apply, make sure you’re attaching all the required supplementary documentation to reduce the time spent on clarification & additional requests. Also, make sure you are providing the latest available documents.
💡 Note that a lot of below do not seem ‘mandatory’ in the application portal, hence not deemed necessary. However, we learned from experience that it would be better to prepare and submit these in advance – if the portal is running out of submission space, you can reach out to HKPC via email to submit additional documents.
Supplementary Documents
Below are the supplementary documents we suggest you submit from Day 1 (including but not limited to the ones directly asked in the submission platform) to reduce processing time:
- Copy of Business Registration (with the digital payment record), and the Certificate of Incorporation (make sure the business information such as name, address, etc. are consistent across the documentation.)
- Copy of documentary proof of the shareholders on the Annual Return (NAR1)
- Proof of substantive ongoing business, supported by:
- Documentary proof of latest 6 months’ MPF record summary list with employee names
- 5-6 sets of latest 6 month’s business transaction documents such as purchase order, invoice, bank in receipt, etc.
- Copy of tenancy agreement or lease agreement of the registered office
- Documentary proof of the applicant’s annual sales turnover – e.g. if your sales activity happens digitally, a copy of the Stripe payments and invoices, etc.
- Latest signed auditor’s report
- Additional information on the business such as the customer types
Post-approval process
If your application is approved by the government, you will receive a Notification Letter via email. Once you receive the Letter, it takes another 4 weeks for HKPC to send you the Funding Agreement letter to finalise the process.
- You will be assigned a Project Manager for this purpose, and you should be able to modify the project start & end date accordingly if the timeline has changed.
- Make sure that you are aware of all the post-approval and post-project obligations on progress reporting, auditing, and record retention.
