BizMagnet BUD consultants often reach clients from different background, and find out that some fail to apply for the BUD Fund on their own. The $4 million grant is so attractive that companies submit the BUD application without knowing the detail. If enterprises want to get the government funding, it would be better to know the BUD application requirement to avoid some common mistakes first.
Not eligible to the BUD Fund
The first word of clients is usually, “I want the BUD money to do this,” or “I need the BUD money to do that”. As a professional consultant, our first concern is always the eligibility, the necessary condition of the application. No matter how good the business plan is, the BUD Fund is nothing for ineligible companies. One of the common situation is all the substantive operation is at the local business, while the Hong Kong applicant company has almost no comparable business. For example, no MPF record. Moreover, some applicants cannot show a clear shareholding structure or fails to disclose natural person behind offshore companies. According to the regulation, all related entities should disclose to ultimate natural person shareholders. All these will lead to application failure.
Unrecognized relation between Hong Kong applicant company and local business
The second concern after eligibility is the relation between the Hong Kong applicant company and the local business. Type (ii) BUD project allows 3 types of relation between applicant and the local business only, and many companies fail to fulfil this requirement to proceed the application. In general, sizable enterprises usually possess hierarchies of entities. Therefore the applicant and the local business are in relation regarded as “sister companies”. This is not a qualified relation for the BUD Fund.
BUD trivia: The Blind Spot of BUD Fund
Business plan not to goal and budget requirement
HK $4,000,000 of the BUD fund is attractive to a lot of SMEs. Some have no plan to brand, upgrade or promote but create a business plan in order to get the fund. Once the Secretariat studies the BUD proposal and finds out a lot of doubtful questions, the fragile application will become a failure finally. On the other hand, companies cannot implement only 1 item in the BUD Fund. For some firms which want the money to purchase machines only without marketing plan, they cannot provide a balanced budget and the case will fail, too.
As a proper BUD consultant, BizMagnet accumulates experience by all means to save our clients from mistaking. The successful BUD story of our client is everything. If you want to expand in mainland or FTA markets with the BUD Fund, please contact BizMagnet.
Related article: Common items in BUD Fund Projects