Asia SGE | Hong Kong BUD Fund FAQ: Answering the Top Questions from Hong Kong's Business Community

For established businesses in Hong Kong, growth is not merely an objective but a continuous requirement. The question is no longer whether to expand into new markets, but how to execute that expansion with maximum efficiency and minimum strategic risk. This is where the Hong Kong government's BUD (Branding, Upgrading and Domestic Sales) Fund transitions from a potential source of funding into an essential component of a mature market-entry strategy.

What is BUD fund?

The BUD Fund provides a structured, co-investment framework designed to de-risk and accelerate development in key external markets, including Mainland China, the ASEAN region, and some of the One Belt One Road countries. It enables seasoned management teams to systematically address the tangible costs of expansion—such as regulatory compliance for new market entry, development of market-specific e-commerce platforms, targeted consumer branding campaigns, and participation in international trade exhibitions.

Eligibility is clear and performance-based: it is available to all non-listed companies with substantive operations in Hong Kong. The fund operates on a defined matching basis, requiring a committed partnership between the business and the government. This model ensures that supported projects are grounded in serious commercial strategy.

For the professional business community, the BUD Fund represents more than capital; it is a mechanism for disciplined growth. It allows executive teams to transform strategic plans for regional dominance into fully resourced, accountable projects. In a competitive landscape, utilizing this available tool is not an aggressive move, but a rational one.

A. Eligibility & Basic Framework

1. As a Hong Kong-registered company with a foreign founder/director, am I fully eligible for the BUD Fund?

Yes, you are fully eligible. The fund is open to all non-listed companies registered in Hong Kong, regardless of the founder's nationality, as long as you can prove you have "substantive business operations" in the city. This levels the playing field for expat-led businesses.

2. Is there a minimum period of operation for my company to qualify?

No, there is no specified minimum period of operation for the BUD Fund itself. The key requirement is proving substantive operations through documents like MPF records, audited accounts, business contracts, and invoices.

3. Can I apply to both the Mainland China and ASEAN & Other Markets streams?

Yes, you can apply under both geographical streams. The fund supports expansion into Mainland China and 39 other economies covered by Hong Kong's Free Trade Agreements, including the 10 ASEAN nations, the UK, Australia, and Japan. You can run different projects in different markets.

B. Financials & Funding Scope

4. What is the maximum grant amount?

Maximum Grant Amounts (Post-March 14, 2025 Reforms)The cumulative funding ceiling per company is HK$7 million for up to 70 projects. Under the new 1:3 matching ratio (Government 25%, Enterprise 75%), limits are:

• General Applications: HK$800,000 per application.

• "Easy BUD": HK$100,000 per application.

• "E-commerce Easy": HK$800,000 per application, with a separate cumulative cap of HK$1 million for e-commerce projects.

• Active Project Limit: Total approved funding for all ongoing/incomplete projects cannot exceed HK$800,000 at any one time.

5. What is the matching ratio?

For applications submitted on or after 14 March 2025, the matching ratio is 1 (Government) : 3 (Enterprise). This means the government funds up to 25% of the approved project cost, and your company must contribute the remaining 75% in cash.

6. What types of expenses are eligible?

Eligible expenses must be for specific, time-limited projects aimed at overseas market expansion. Common items include:

• Branding & Sales: Marketing, advertising (TV/online/KOLs), trade show participation, promotional material design.

• Upgrading: Website/e-commerce setup, mobile app development, purchase of machinery/equipment.

• Business Development: Professional fees for setting up a new overseas entity, hiring project-dedicated staff, testing and certification, patent/trademark registration.

7. What is NOT covered?

The fund cannot be used for day-to-day operational costs. This includes office utility bills, office rent in Hong Kong, purchasing stock for resale, and ongoing business maintenance.

8. Is the funding disbursed upfront or on reimbursement?Disbursement and Reimbursement Rules (2025)

The fund remains a reimbursement-based scheme with specific upfront options for certain application tracks:

• General and E-commerce Easy:

  • Initial Payment: You can request an upfront disbursement of 20% of the approved government funding after signing the agreement.

  • Final Payment: The remaining balance is reimbursed upon project completion and successful verification of the final report and audit.

• "Easy BUD":

  • Initial Payment: No upfront or initial payment is available.

  • Full Reimbursement: 100% of the approved funding is disbursed only after the project is completed and the final audit is accepted. 

C. Application Process & Project Design

9. What makes a strong project proposal?

A strong proposal has clear, measurable goals linked to market expansion. It should detail a specific strategy (target audience, promotion channels), a realistic timeline, a justified budget, and expected outcomes like sales growth.

10. How long does the application approval process typically take?

• "Easy BUD": Approximately 30 working days.

• General and E-commerce Easy applications: Approximately 60 working days. These are processed in batches with quarterly cut-off dates.

11. Do I need a local partner or entity already set up in the target market?

No, you do not. A significant advantage of the BUD Fund is that you can use it to cover the costs of establishing a new business entity in the target market. You are not required to have one before application.

D. Execution & Compliance

12. Once approved, what are the key contractual obligations?

You must complete the project within the stipulated timeframe, use funds only for approved purposes, follow procurement rules, and submit reports.

• Project Duration: General/E-commerce Easy: 24 months max. Easy BUD: 12 months max.

• "In-Force" Funding Cap: The total government-funded portion of all your ongoing projects cannot exceed HK$800,000 at any one time.

13. What kind of reporting and auditing is required?

You must submit periodic progress reports and a final report. A mandatory independent audit is required upon project completion. The audit fee (capped at HK$10,000) is also fundable under the 1:3 matching ratio.

14. Are there deadlines for project completion?

Yes, as above: 24 months for General/E-commerce Easy, and 12 months for Easy BUD. Extensions are rarely approved.

15. What are the consequences if my project doesn't meet its goals or funds are misused?

You would likely have to return the grant funds. Misuse could affect future applications. Strict adherence to the approved plan, maintaining all invoices and receipts, and following procurement rules are critical.

E. Practical Support

16. Is it advisable to use a consultant?

The government does not appoint or endorse any consultants. However, an experienced consultant can help navigate the process and avoid common mistakes, but you can apply directly.

17. Which government department administers the fund?

The fund is administered by the Trade and Industry Department (TID) and implemented by the Hong Kong Productivity Council (HKPC).

18. Are there any introductory seminars or workshops (in English)?

Asia SGE has introductory workshops for BUD Fund from time to time.

19. Can the fund be used with other government SME support schemes?

Yes, the BUD Fund is separate from other schemes like the SME Export Marketing Fund (EMF) or the Technology Voucher Programme (TVP). You can apply to them concurrently for different purposes, as long as you don't double-fund the same expense.

Additional Questions from Your Specific Context

20. For my specific business idea, which stream is more suitable?

• "Easy BUD": Best for a small, quick test (e.g., a single trade show or a marketing campaign) with a simple, self-run project.

• "General Application": Best for a comprehensive market entry plan involving multiple activities like branding, setting up operations, and hiring.

• "E-commerce Easy": Specifically for digital sales expansion into Mainland China or ASEAN via online stores, apps, and platform ads.

21. Which eligible activities give the biggest boost?

This depends entirely on your business barrier to entry. For many, professional fees to correctly set up a legal entity in the complex Mainland China market, or investment in a strong e-commerce storefront and initial marketing, can provide the most crucial foundation for growth.

22. Do I have the capacity to manage the grant administration?

This is a key consideration. While the application is online, the post-approval administrative workload for compliance, reporting, and audit is significant. Assess if your team has the time and attention to detail, or if you should budget for professional grant administration help.