To support enterprises in exploring more diversified markets, the Government has further injected $1.5 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales (the “BUD Fund”) and launched a new round of enhancement measures by phases starting from July 2021. The enhancement measures include extending the geographical coverage of the Fund to include all economies with which Hong Kong has signed Investment Promotion and Protection Agreements (“IPPAs“) and increasing the cumulative funding ceiling per enterprise to $6 million. In this episode, we will briefly discuss the details of the BUD fund and the upcoming enhancements:
Aim of the fund
The Hong Kong government has set up the BUD fund to help Hong Kong enterprises to assist Hong Kong enterprises in exploring and developing the Mainland market and other oversea markets through developing brands, upgrading and restructuring their operations and promoting domestic sales in those jurisdictions.
To be eligible to apply for the BUD fund, the enterprise has meet the following criteria:
- A non-listed enterprises registered in Hong Kong under the Business Registration Ordinance (Chapter 310)
- With substantive business operations in Hong Kong
Eligible Hong Kong enterprises can submit applications to carry out projects for branding, upgrading and/or development sales in the Mainland, Free Trade Agreements (“FTA”) and/or IPPA markets. Some examples that fall within the scope of the Mainland, FTA and/or IPPA Programme are listed as follow:
- Branding: Brand strategy, brand building, positioning and identity, brand equity research, brand promotion, and etc.
- Upgrading & Restructuring: New product design, adoption of advanced technology, management and logistics system upgrading, manufacturing automation, and etc.
- Promoting Sales: Marketing strategy and research, sales strategic planning, sales channel establishment and management, advertisements, promotion of product(s)/service(s) and etc.
Current Jurisdictions Covered
The BUD Fund covers applications for undertaking projects to develop the markets of
- Mainland China
- ASEAN (i.e. Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam),
- four member states of the European Free Trade Association (i.e. Iceland, Liechtenstein, Norway and Switzerland),
- New Zealand
- two IPPA economies (i.e. Japan, Republic of Korea) under the phase 1 enhancement.
The funding will be provided in the following manner:
- on a matching basis, i.e. the Government will cover a maximum of 50% of the total approved project cost and the enterprise has to contribute no less than 50% of the total project cost in cash.
- each enterprise may obtain funding for a maximum of sixty approved projects and the total cumulative funding amount is $6,000,000 under BUD Fund.
Each funded project should be completed within 24 months.
Enhancements in 2021-22
The enhancements will be implemented by three phases from 30 July 2021 to the second quarter of 2022, as follows –
|Phase 1 (effective from 30 July 2021)|
|Phase 2 (Q1 2022)|
|Phase 3 (Q2 2022)|
For more details of the BUD fund, please feel free to contact us.
Chartered Accountant, LL.M.
Tel: (852) 3102 1995
Senior Tax Manager
Tel: (852) 3102 1995
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