2024 BUD Fund Applications: Eligibility Criteria, Approval Timeline, and Essential Highlights. How Can We Help?

 

Numerous Small and Medium-sized Enterprises (SMEs) are considering expanding their operations outside Hong Kong. How can they finance this growth? The BUD Fund is the solution!

A “Dedicated Fund on Branding, Upgrading and Domestic Sales” (BUD Fund, for short) offers financial assistance to local companies aiming to develop their brands, enhance and restructure their business activities, and boost domestic sales in other regions. 

The BUD Fund supports a variety of markets and aids in broadening business reach. Additionally, the 2023 Budget introduced “BUD Easy,” which simplifies and accelerates the application process. 

Are you interested in upfront funding? What are the primary eligibility criteria for the BUD Fund? Continue reading to discover the details of this funding opportunity and seize business prospects.

Policy Address 2023/24: Introducing “E-commerce Easy”

In the 2023 Policy Address, the government proposed “E-commerce Easy” under the BUD Fund, allowing businesses to utilise up to $1 million for e-commerce projects within the overall funding limit of $7 million. The government is also hastening the implementation of the “Single E-lock Scheme” and the “Trade Single Window,” among others, to improve customs and e-commerce delivery efficiency.

The government is also forming an inter-departmental E-commerce Development Task Force to assist Hong Kong’s SMEs grow their e-commerce businesses in Mainland China. 

This includes organising Hong Kong Shopping Festivals on e-commerce platforms to raise awareness of Hong Kong brands and develop a national domestic consumption market.

To learn more about other government support for SMEs and corporations, please read Government SME Funding Scheme 2023: Overview and Application Criteria.

Budget 2023: Establishing “BUD Easy”

Following the recent enhancement of the BUD Fund’s financial capacity, the 2023 Budget has made a notable announcement regarding a substantial injection of an additional 500 million HKD. This sizable commitment aims to deliberately assist small and medium-sized businesses (SMEs) in their efforts to grow and expand into both domestic and foreign markets. 

The introduction of “BUD Easy” has been highlighted as a pivotal measure to streamline and accelerate the funding application process. This initiative is designed to simplify the application procedure, thereby reducing the administrative burden on SMEs and facilitating quicker access to the necessary funds. 

The authorities have committed to disclosing additional in-depth information regarding the requirements for eligibility, the application process, and the particular advantages SMEs might anticipate from this program. The goal is to ensure that the enhanced funding and the streamlined process directly contribute to the scalability and competitiveness of SMEs in the rapidly evolving business landscape.

 

The BUD Fund: Maximum HKD 7 Million Per Company

The BUD Fund operates on an open-door policy, welcoming applications throughout the calendar year, thereby offering continuous support for companies looking to expand and innovate. Remarkably, each eligible company has the potential to secure approval for an extensive series of up to 70 projects. 

This generous provision allows businesses to embark on multiple ventures with a financial ceiling of HKD 1 million allocated for each project. Consequently, a single company can accumulate up to HKD 7 million in funding, representing a substantial investment in its growth and development initiatives.

The funding model employed by the BUD Fund is notably collaborative, operating on a matching basis. This approach mandates that the government will finance up to 50% of the total cost approved for each project. The applicant must fulfil the remaining funding requirements for the project to ensure a partnership in which both parties have an equal stake in its success. This co-financing strategy leverages governmental support and encourages companies to manage their project expenditures responsibly.

Companies availing themselves of this funding opportunity are given the flexibility to manage multiple projects concurrently, a particularly beneficial feature for businesses with diverse expansion plans or those looking to innovate rapidly across different areas. However, it is stipulated that each project must reach completion within a stringent timeline of two years or less. 

This time frame ensures that projects are executed efficiently and that outcomes are realised promptly, facilitating a quicker impact on the company’s growth and the broader economy. The BUD Fund’s framework, which is both flexible and structured, is intended to optimise resource utilisation and create a dynamic business environment that gives enterprises the ability to accomplish their strategic goals with solid backing from the government.

Who Qualifies for the BUD Fund?

The BUD Fund is primarily split into the “Mainland Programme” and the “FTA and IPPA Programme,” targeting different markets. The former is for companies looking to expand into Mainland China, while the latter assists those aiming for overseas expansion. Aside from market focus, both programmes’ application processes and eligibility criteria are similar. Below are the specifics.

Basic Eligibility Criteria

Before applying, companies must meet these fundamental requirements:

• The fund is for Non-listed companies registered in Hong Kong under the Business Registration Ordinance (Chapter 310) operate in Hong Kong;
• Companies must have “Substantive business operations” means the company engages in actual operations and transactions. Factors considered include employment, tax payments, and business transactions within Hong Kong. Shell companies or those primarily operating outside Hong Kong are ineligible. Applicants must submit evidence of their significant operations in Hong Kong, such as:
• a. Employee records
• b. Financial statements
• c. Business transaction/operation details.

Application Eligibility

The BUD Fund is designed as a strategic financial instrument to bolster the competitiveness of Hong Kong-based businesses, facilitating their entry or expansion into Mainland China and other international markets. This initiative reflects a broad approach, allowing many companies to benefit from its support regardless of their industry sector. 

Eligibility for the fund is remarkably comprehensive, allowing businesses to apply for funding across an extensive portfolio of up to 70 projects. Each of these projects is financially supported up to a limit of HKD 1 million, providing substantial backing for a range of growth-focused activities.

The BUD Fund supports various projects, including brand development, business upgrading and transformation, and domestic market expansion, reflecting its broad eligibility criteria. This wide-ranging support addresses multiple facets of business growth and market competitiveness.

The Fund acknowledges the importance of building solid and recognisable brands that can stand out in crowded markets by including brand development. The focus on business upgrading and transformation highlights the fund’s commitment to fostering innovation and efficiency in business operations, ensuring that companies remain competitive in a rapidly changing business environment. 

Last but not least, the fund assists companies in growing their market share locally or expanding their market reach both inside and outside of Hong Kong by sponsoring domestic market expansion.

The absence of industry restrictions signifies the fund’s recognition of the diverse nature of Hong Kong’s economy and its intention to support a broad spectrum of businesses. 

From technology startups aiming to scale up their operations to traditional manufacturing companies looking to innovate or explore new markets, the BUD Fund is structured to meet the varied needs of Hong Kong’s business landscape. 

This inclusivity ensures that the benefits of the fund are accessible to a broad cross-section of businesses, all of which are pivotal to Hong Kong’s economic vitality and international competitiveness. 

Provided companies meet the fund’s eligibility criteria, they can leverage this support to undertake projects that propel their growth, enhance their competitive edge, and achieve sustained success in local and global markets.

 

The BUD Fund Guide categorises eligible projects into two types:

 

Type 1: Holistic business plan	Type 2: Implementation of specific measures
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 mainland China or in the FTA and IPPA Programme countries.	Projects that involve the implementation of specific measures in the areas of branding, upgrading and restructuring and/or promoting sales by the applicants themselves.

 

Examples of business activities covered by the BUD Fund	Coverage Details
Exhibitions/promotional events (including virtual exhibition)	Not to exceed 50% of the total project expenditure
Design and establish online sales platform	Not to exceed 50% of the total project expenditure
Establish/enhance company website	Not to exceed HKD $100,000 per application
Place project related advertisement (online/offline)	Not to exceed 50% of the total project expenditure
Develop/enhance mobile applications (for promotional purposes only)	Not to exceed 50% of the total project expenditure
Design and produce promotional materials (flyers, pamphlets, posters or other relevant expenses)	Not to exceed 50% of the total project expenditure
Patent/trademark registration (patent/ trademark/design/ utility model registration directly related to the project(s))	Maximum cumulative funding amount HKD 600,000 per company
*For reference only, the actual proportion of funding varies from case to case

 

*Note: These are only examples; actual funding proportions may vary.

It’s important to note that Types 1 and 2 applications cannot be combined in a single project or submitted simultaneously. Type 2 applications should not include market research or domestic sales plan formulation. Companies unfamiliar with market demands should conduct relevant research before developing project content or opt for Type 1 applications.

Additional Project Requirements:

• Projects must not already be in progress (unless part of it qualifies as a separate project);
• Projects must be at most a two-year duration;
• For projects involving sales in Mainland China, the FTA, or the IPPA markets, companies must secure local sales licences/certificates/approvals before starting;
• Companies generally need to initiate local brand trademark registration for brand creation projects and ensure the brand is still required to be registered;
• Promotional activities in Hong Kong, such as ads and exhibitions, must directly relate to business development in the targeted markets, and investment proportions should be reasonable.

Approval Timeline

The BUD Fund operates on a rolling basis, ensuring businesses can apply for funding at any point throughout the year. This continuous acceptance and processing of applications are central to the fund’s mission of providing timely support to businesses in need. However, the duration required to obtain approval is flexible; it fluctuates depending on several factors. 

These include the current volume of applications being considered, the complexity of the projects proposed, and the degree to which the submitted information meets the required standards for assessment. Such variability underscores the importance of offering a well-prepared and comprehensive application to facilitate a smoother evaluation process.

The Hong Kong Productivity Council (HKPC), tasked with overseeing the approval process, endeavours to complete its review and issue decisions within 60 working days after receiving a complete application. This timeframe is contingent upon the application being accompanied by all necessary documentation and any further clarifications that might be requested to understand the project’s scope and impact fully. 

The 60-working-day period indicates HKPC’s commitment to efficiency, balancing thoroughness with the need to deliver decisions promptly. Applicants are encouraged to ensure their submissions are as detailed and precise as possible, which can significantly expedite the review process. This systematic approach to application processing aims to minimise wait times for applicants while maintaining the integrity and effectiveness of the funding program.

Companies can track their application status online, and HKPC will notify applicants of the decision in writing.

 

Funding distribution methods

You have two options for the financing approval method: you can receive two instalments, the interim and the final instalments, or you can get paid in full after the project. Details are as follows:

Reimbursement methods	Project progress	First instalment	Interim instalment	Final instalment
First instalment	Within 24 months	75%	/	Remaining balance
Without first instalment	Below 18 months	/	/	Remaining balance
	Over 18 months and 24 months	/	Up to 50% of the total government approved funding (subject to project progress and actual expenditure) actual expenditure)	Remaining balance

 

BUD Fund’s First Instalment Application Criteria and Distribution Approach

Only projects approved for the first instalment and that selected this option during application are eligible for funding upon commencement.

• The first instalment is capped at 75% of the approved funding and must be returned if it exceeds the actual amount;
• Companies must provide a guarantee for amounts exceeding HKD 1 million;
• The instalment is arranged after signing the funding and guarantee agreements (if applicable);
• Ongoing and approved projects may also apply for the first instalment;
• Applying for the first instalment disqualifies companies from receiving an interim instalment; the remaining balance is paid after project completion.

How can we help companies which obtain this specific fund?

Our agency will assist your business in leveraging the BUD Fund’s opportunities, especially for B2B companies aiming to expand into new markets. Our expertise can significantly enhance a company’s digital presence and lead generation strategies, which are vital to create a stable revenue stream in today’s online business environment.

Here’s how Digital Nomads Hong Kong can contribute to companies that secure BUD Fund assistance, focusing on website enhancement and a full fledged digital marketing plan, emphasising the importance of Google Ads for B2B enterprises.

 

Website Enhancement for the New Target Market

For businesses looking to enter new markets, the first point of interaction with potential clients often happens online. A website that resonates with the target market’s preferences and expectations is crucial. We can assist in several ways:

• Market-specific Customisation: The website’s design, content, and user experience can be customised to accommodate the target market’s language and cultural preferences;
• SEO Optimization: By optimising the site for search engines specific to the new market,  we ensure that your business ranks well in search results, which is crucial for visibility;
• User Experience (UX) Design: Enhancing the UX design to build a website that is intuitive and user-friendly for the target audience, encouraging longer visit durations and higher conversion rates.

Full-fledged Digital Marketing Strategy

A comprehensive digital marketing strategy is indispensable for businesses looking to penetrate a new market effectively. Our digital marketing agency can develop and implement strategies encompassing various components:

• • Content Marketing: Creating valuable content tailored to the interests and needs of the target audience, helping to build brand authority and trust;
  • Social Media Marketing: Leveraging social media platforms popular in the target market to engage potential clients and build community around the brand;

• Online Advertising Campaigns: Creating conversions focused and well targeted Google /YouTube and Meta Ads that aim at increasing the brand’s presence in the new market.   

 

Importance of Google Ads for B2B Companies

When entering a new market Google Ads is particularly crucial for B2B companies for several reasons:

• High-Intent Users: With 93% of B2B buying processes starting with an online search, Google Ads allows businesses to capture high-intent users actively searching for solutions;
• Targeted Advertising: Google Ads offers advertising options that enable businesses to reach potential clients at various stages of the buying process with messages that resonate with their immediate needs;
• Measurable ROI: With the help of Google Ads’ comprehensive analytics, businesses can evaluate the effectiveness of their campaigns and modify their tactics to optimise return on investment;
• Speed and Agility: Unlike SEO, which requires time to yield results, Google Ads can provide immediate visibility and lead generation opportunities.

Given these factors, Google Ads should be a vital component of any digital marketing strategy for B2B companies. With PPC advertising leading to 50% more conversions than organic advertising, using Google Ads can significantly enhance a business’s lead generation and sales efforts.

We are here to support you!

With a long established expertise in digital marketing, our agency is well-positioned to help BUD Fund recipients navigate the complexities of Google Ads, ensuring that their campaigns are optimised for success.

 

Leveraging our knowledge for website enhancement and digital marketing, mainly through Google Ads, we can provide BUD Fund recipients with a competitive edge in new markets. Our strategies will improve visibility and brand awareness and drive lead generation and sales, which are crucial for successful market expansion.

 

If you need a trusted and experienced partner to start your Bud Fund project don’t hesitate to get in touch!