The BUD Fund has the latest improvement on 9th April, 2020. Each eligible enterprises can apply the Mainland Programme or the FTA Programme for at most 40 times. The maximum grant for each application is HKD 1 million, at a one-to-one basis. i.e. for each dollar the enterprise finances, the government will grant one dollar at the same time. The cumulative subsidy ceiling is HKD 4 million, and we are going to discuss the funding arrangement.
BUD Fund Initial Payment
Once the BUD application is successful, the enterprise can select to obtain an initial payment which is equal to 75% of the total grant. For example, the government will grant HKD 600,000 to a project of HKD 1.2 million, and the initial payment will be HKD 450,000. The final payment is the remaining subsidy, depends on the actual costs.
If the enterprise select NOT to get the initial fund, and the project spans more than 18 months, the government will provide 50% of the total subsidy as a mid-term payment after the mid-term reports accepted. In general, most enterprises chooses to accept the initial payment.
Personal Guarantee by Major Shareholders
If an enterprise gets more than HKD 1 million cumulatively, and likes to accept initial payment, a major shareholder (who holds more than 30% of shares) or a company owner has to provide personal guarantee. Take the above example again, the enterprise accept HKD 450,000 as the initial payment but doesn’t proceed anything, then it has to return all the money to the government. In addition, the major shareholder guarantor is responsible for the payment if the enterprise fails to return. 1
BUD Fund Application Consultant
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- Paragraph 5.2, BUD Fund Application Guide https://fta.bud.hkpc.org/sites/default/files/download/FTA-Guide-to-Application-EN.pdf
