BUD Fund
BUD Fund, officially known as the “Dedicated Fund on Branding, Upgrading, and Domestic Sales” (The BUD Fund), was launched by the Hong Kong Special Administrative Region Government in June 2012. This initiative aims to support enterprises in enhancing their competitiveness and further expanding into international and mainland markets. The fund covers a wide range of areas, including brand building, business transformation and upgrading, and market expansion projects in mainland China and other Free Trade Agreement (FTA) markets.
The fund operates on a “co-funding” model, where the government subsidizes 50% of the eligible expenses, and the enterprise bears the remaining 50%. Through the BUD Special Fund, small and medium-sized enterprises (SMEs) can alleviate financial pressure and implement overseas expansion plans more flexibly.
To apply for the BUD Special Fund, enterprises must meet the following basic requirements:
Place of Registration: The enterprise must be registered in Hong Kong and hold a valid business registration certificate.
Business Scale: The applicant must have actual business operations in Hong Kong, such as owning an office, employing staff, and maintaining stable business activities. It should not be a shell company registered in Hong Kong without actual operations.
Non-Listed Company: The applicant must be a non-listed company, meaning it is not listed on any stock exchange.
Project Relevance: The proposed project must be directly related to brand development, business upgrading, or market expansion, and must clearly demonstrate how it will enhance competitiveness or expand market reach.
Financial Stability: The enterprise must provide financial statements for the past one to two years to prove its ability to cover the non-subsidized portion of the project expenses and maintain stable operations.
Past Records: If the enterprise has previously applied for the BUD Fund, it must ensure that past projects were completed as required and that relevant reports were submitted. Failure to do so may affect new applications.
Please note that the above are only the basic eligibility criteria. Even if these requirements are met, final approval will depend on the overall project plan, feasibility, and expected benefits. Enterprises must submit a detailed project proposal during the application process, including clear objectives, budget allocation, execution details, and expected outcomes, to demonstrate how the project will promote brand development or market expansion. For further information or to increase the chances of success, it is recommended to seek assistance from professional consultants.
The BUD Special Fund primarily covers three categories: Brand Development, Business Upgrading and Transformation, and Market Expansion. Below is a detailed explanation:
Scope: Supports enterprises in developing or strengthening their product/service brands in FTA and/or investment agreement markets.
Requirements: Enterprises must first develop a brand strategy and implement related brand development or improvement initiatives in Hong Kong before expanding into FTA and/or investment agreement markets.
Examples:
Brand Strategy and Positioning: Develop a brand vision and strategy based on target customer preferences to enhance brand image.
Brand Building and Communication: Design marketing materials, protect brand image through intellectual property, and promote the brand through multimedia advertising.
Scope: Introduces innovative technologies or upgrades existing systems, such as ERP (Enterprise Resource Planning) or CRM (Customer Relationship Management) systems, to improve efficiency and product quality.
Examples:
Product Innovation and Repositioning: Develop new products or upgrade existing product design processes.
Technology and Management Upgrades: Adopt advanced technologies to improve productivity, such as upgrading manufacturing molds, production, and testing technologies.
Scope: Assists enterprises in entering new markets, such as Greater Bay Area cities or other FTA markets.
Examples:
Marketing Launch Plan: Identify target markets and develop marketing strategies.
Marketing Operations Management: Restructure organizational frameworks and redesign business processes to support new marketing initiatives.
Operating Expenses for New Business Units in FTA/Investment Agreement Markets: Covers expenses related to establishing new business units in target markets, such as business registration fees, operating licenses, rental and renovation costs, and professional service fees. These expenses are capped at 20% of the total project budget.
Hiring Additional Staff: If the project requires hiring new staff directly related to the project, the enterprise can receive funding for their salaries and related expenses, up to 50% of the total project budget. Note that these employees must be newly hired and directly related to the project.
Purchasing/Leasing Machinery or Equipment: Funding is available for purchasing or leasing specialized machinery or equipment for the project, such as molds for new product manufacturing or specialized computer hardware and software. These expenses can cover up to 70% of the project budget.
Producing/Purchasing Product Samples or Prototypes: Expenses for producing or purchasing product samples or prototypes (e.g., for development or demonstration purposes) are eligible for funding, up to 30% of the total project budget. This does not include employee or equipment costs during the production process.
Advertising Expenses: Advertising expenses on commercial media (e.g., newspapers, magazines, online platforms, outdoor ads) are eligible for funding, up to 50% of the project budget. This also includes fees for hiring spokespersons or other related advertising costs.
Travel and Accommodation Expenses: Travel and accommodation expenses related to the project are eligible for funding, up to 20% of the total project budget. This includes travel between Hong Kong and the target market, as well as local transportation costs.
Patent/Trademark Registration Fees: Fees for patent or trademark registration related to the project are eligible for funding. Each enterprise can receive up to HKD 600,000 for patent/trademark registration under the BUD program.
Mobile App Development or Optimization Costs: Expenses for developing or optimizing mobile applications are eligible for funding, up to 50% of the project budget.
Brand or Technology Licensing Fees: Licensing fees for brands or technologies are eligible for funding, with a cap of HKD 400,000 per enterprise, not exceeding 10% of the total project budget.
Website Optimization Costs: Expenses for optimizing the company website are eligible for funding, with a maximum of HKD 100,000 per application.
Expenses for Creating Project-Related Websites: This includes creating new e-commerce websites or new domain company websites.
Designing and Building Online Sales Platforms: Expenses for setting up online sales platforms, such as joining e-commerce platforms like Taobao or Tmall.
Exhibition or Trade Show Participation Fees: Expenses for participating in exhibitions or trade shows in Hong Kong and target markets, including virtual exhibitions organized by government agencies or reputable exhibition organizers.
Expenses for Hosting or Participating in Promotional Events: Expenses for hosting or participating in promotional events, such as new product launches.
Production of Promotional Materials: Expenses for producing promotional materials like flyers, brochures, and posters are eligible for funding.
Testing/Certification/Registration Expenses: Expenses for product testing, certification, or registration related to the project are eligible for funding.
Consumables Procurement Expenses: Expenses for purchasing consumables (e.g., raw materials) related to the project are eligible for funding, provided they are detailed in the application.
External Audit Fees: It is recommended to apply for funding for external audit services, which are fully subsidized, with a maximum of HKD 10,000 per audit.
The BUD Special Fund covers two main programs:
Mainland Program: Hong Kong enterprises can apply for funding to support market expansion and business development in mainland China.
FTA and Investment Agreement Program: The BUD Special Fund also covers multiple FTA and investment agreement markets, including:
ASEAN Member States: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.
Other Countries and Regions: Australia, Austria, Bahrain, Belgium-Luxembourg Economic Union, Canada, Chile, Denmark, European Free Trade Association (including Iceland, Liechtenstein, Norway, Switzerland), Finland, France, Georgia, Germany, Italy, Japan, South Korea, Kuwait, Macao, Mexico, Netherlands, New Zealand, Peru, Sweden, Turkey, United Arab Emirates, United Kingdom.
Examples of Countries Not Covered by the BUD Special Fund:
Asia: Taiwan, India, Sri Lanka, Bangladesh, Nepal, Pakistan.
Europe: Russia, Ukraine, Poland, Czech Republic, Hungary, Romania, Bulgaria.
Americas: United States, Honduras, Argentina, Colombia, Venezuela, Uruguay.
Africa: Any African country.
Middle East: Saudi Arabia, Israel, Iran, Iraq.
Understand Eligibility Requirements: Before applying, ensure that your enterprise meets the eligibility criteria for the BUD Special Fund.
Prepare Application Materials:
Business Registration Certificate: Submit a copy of the enterprise’s business registration certificate to prove legal registration in Hong Kong.
Proof of Major Shareholders: Submit proof of major shareholders, such as the Annual Return (AR1 form) issued by the Companies Registry.
Proof of Hong Kong Business Operations: Provide documents proving actual business operations in Hong Kong, including:
MPF contribution records.
Salary expenditure records.
Proof of income and expenses for the past three months (e.g., invoices, receipts, lease agreements, utility bills, bank statements, inventory purchase or sales records).
Audited annual accounts.
Bank statements for the past three months.
Proof of Investment in Mainland or Overseas Business: If the enterprise has a direct investment relationship with a mainland or overseas business unit, provide relevant proof such as investment agreements or contracts.
Online Application Form: Complete the online application form, providing basic enterprise information and a detailed description of the project’s background, objectives, budget, and expected outcomes.
Submit Application: Submit all materials to the Hong Kong Productivity Council (HKPC) via the online application form.
Approval Process:
Initial Review: HKPC will conduct an initial review to ensure all required materials are complete.
Evaluation Process: HKPC will evaluate the project based on feasibility, innovation, and expected benefits. Additional information or meetings may be required.
Approval Results: HKPC will decide whether to approve the application. Possible outcomes include:
Full Approval: The project meets all requirements and can proceed as planned.
Conditional Approval: The project is generally approved but requires additional conditions to be met (e.g., submitting business licenses, trademark registration proof).
Rejection: If the project is not approved, the enterprise can revise the project plan based on feedback or seek assistance from professional BUD consultants.
Sign Agreement: Once approved, the enterprise and HKPC will sign a funding agreement outlining the terms and conditions.
Project Implementation: The enterprise must implement the project according to the plan and submit regular progress reports to HKPC, including financial and work progress reports.
Funding Disbursement: The enterprise can apply for funding disbursement based on actual expenses and HKPC’s verification.
Project Completion and Reporting: Upon project completion, the enterprise must submit a final report detailing the project’s outcomes, expenses, and results.
Audit and Monitoring: HKPC will conduct regular monitoring and audits to ensure compliance with the funding agreement.
Applying for the BUD Special Fund can be a complex and challenging process for many enterprises. While the application process is clearly outlined on the HKPC’s official BUD website, the diversity of project scales, requirements, and funding conditions makes professional assistance invaluable. Here are key reasons to engage a funding consultant:
In-Depth Business Plan and Budget Assessment: Consultants will evaluate your business plan and project budget to ensure compliance with BUD requirements, identifying potential risks and preparing you for the application.
Comprehensive Assistance in Preparing Application Documents: Consultants will help you prepare a complete application proposal, ensuring all details are accurate and compelling.
Effective Handling of Government Reviews: Consultants will assist in responding to queries or requests for additional information from the BUD Secretariat, ensuring a smooth review process.
Post-Approval Reimbursement and Execution Support: Consultants will guide you on managing funds and complying with reimbursement procedures, ensuring compliance with government requirements.
Ensuring Project Success and Final Reporting: Consultants will help you prepare and submit the final project report, showcasing the project’s outcomes and ensuring successful completion.
In summary, engaging a trusted funding consultant can significantly improve your chances of success, streamline the application process, and provide ongoing support throughout project execution. This allows your enterprise to focus on core business activities while accelerating growth and transformation.