*This article was written in May 2020. However, the ITC Technology Voucher Programme relaxed the restriction on 14th Aug 2020, please refer to: TVP “related entities” restriction relaxed. Only for TVP.
For all government business subsidies, the applicant should be a company. Some asked BizMagnet before this question: If I set up 10 companies, can I get the same fund for 10 times? The Answer is No, certainly. Ok, it is expected but why? Why can’t I get more by another eligible company? Because in all application guideline you can read this rule:
Related entities* would be treated as one single entity
*Entities set up as different legal entities but having the same individual(s) each holding 30% or more ownership in such entities (up to the ultimate level of natural person(s) if the entities are held by corporate shareholder(s).
D-Biz application guideline
Look back to the first example, if you own 100% shares of all 10 companies, all these 10 companies count as one single entity and their aggregate cumulative ceiling is equivalent to one single company. Furthermore, no matter which holding structure you use, due to the rule of ultimate natural person, your identity must disclose to the Authority and therefore it is just a variation of one single company.
The case of offshore companies
You keep thinking how to crack the government enterprise grant system and come to the point of offshore companies in BVI or Cayman Islands. According to the local law, the shareholders of these offshore companies need not be disclosed. Is it possible to cover your identity by offshore corporate shareholders?
Answer: No.
Once the disclosure trace comes to an offshore company, you need to disclose with evidence or provide a statement. Only if you present false document or make a false declaration that you don’t own it but someone else, you may get the fund. Certainly, all the above acts are criminal and the maximum sentence is 14 years imprisonment. Definitely not a choice.
BUD Fund is more complex
The TVP and the BUD Fund are not exception of the above thumb rule. Furthermore, the application relates to 2 companies sometimes, namely the Hong Kong applicant company and the local market business. Not only the “related entities” rule applies, but also we must show the linkage between the applicant company and the local market company. Read more about the BUD relation requirement.
BizMagnet is a Government Enterprise Grant Application consultant.
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