The Blind Spot of BUD Fund

The following case is a typical story of a Hong Kong manufacturer. In the decade 1990s, the cost of manpower and land kept rising for Hong Kong factories, and many of them decided to move to mainland China. After around 20 years, the economy of China has expanded a lot which leads to the same old problem to these factories. So they have to consider to move to another place again.

Common choices are Southeastern Asian countries, for example Indonesia, Vietnam and Cambodia. Now the role changes, China is no more a factory but a market. These Hong Kong manufacturers produce in Vietnam and sell to the Chinese market.

Produce in Vietnam, Cambodia etc, and Sell to China

A common model for Hong Kong manufacturing business.

Ref: BUD Success: Metal Die Casting

BUD Mainland or FTA Programme?

Now the above manufacturer (namely Mr Chan) hears of the BUD Fund that provides government grant to help businesses in mainland China and Free Trade Agreement (FTA) regions. Mr Chan likes to expand the business in China market, he thinks that he should apply for the Mainland Programme of the BUD Fund. Wait a minute, how can he upgrade the facility in Vietnam with the Mainland Programme? Conversely, if he applies the FTA Programme, he cannot promote sales in China, either. It is just paradoxical.

Therefore, Mr Chan approaches the BUD consultant to ask for the answer. What will the consultant advise?

The Blind Spot of 2 programmes

Unfortunately, Mr Chan cannot take the BUD grant for 2 distant regions in one go. At the very beginning of the BUD Fund programme, there was one and only one programme for mainland China. The Fund extended to ASEAN countries in 2018 and separated into 2 programmes. It is due to the very difference in business practices between China and the rest of the World. Mr Chan’s case is compatible only if the two Programmes merge. (Mainland Programme covers China while FTA Programme covers Vietnam, an ASEAN member). It is the blind spot of the BUD Fund.

BUD Fund Application

Nevertheless, there are still many possible combinations for the BUD Fund. After the pandemic of COVID-19, governments encourage more international investment and entrepreneurship. BizMagnet is a consultant of Government Enterprise Grant Application (GEGA). All inquries are welcome.

Further reading: Notice before BUD Fund application