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Hong Kong supports businesses, technology and talent through incentive programs

In order to keep the city’s competitiveness, Hong Kong’s government offers companies a number of benefits, including programs to support businesses, research and innovation, as well as cultivate talent, and nurture startups. 


International companies and investors have long been attracted to Hong Kong’s pro-business environment and beneficial tax policies.  Additionally, the government offers a number of funding schemes aimed at fostering business growth and innovation.

 

The programs have targeted in recent years the development of certain sectors, such as technology research and development (R&D), as well as supporting the growth of small and medium-sized enterprises and startups. 




Schemes for marketing and business development 

BUD Fund 

The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) was created in 2012 to help Hong Kong-based companies seize opportunities in the Chinese mainland. It was expanded in 2018 to cover the 10 countries in the Association of Southeast Asian Nations (ASEAN) (Singapore, Indonesia, Malaysia, Myanmar, Thailand, Cambodia, Laos, Vietnam, Brunei, and the Philippines). 


Since 2023, the fund grew to include all countries that have signed an Investment Promotion and Protection Agreements (IPPAs) or Free Trade Agreement (FTA) with Hong Kong.  


At the moment, Hong Kong has 23 IPPAs in place covering 32 countries and regions, as well as eight FTAs. Currently, the BUD Fund is applicable to 37 economies, in addition to the Chinese mainland. 


The BUD Fund launched in 2023 “Easy BUD”, a streamlined online application mechanism for SMEs, which reduces in half the time of the usual procedures, to about 30 days. 

 

Companies with eligible projects can receive 50% of the funding required from the government, capped at HK$100,000 (US$12,803) per application. The cumulative funding ceiling for each company under the BUD Fund is HK$7 million (US$896,218), and funding is limited to a maximum of 70 approved projects for each company. 


Private companies based in HK that are registered under the Business Registration Ordinance with “substantive business operations” can apply to the program. 


There are several categories for eligible projects under Easy BUD: 


  • Design and production of promotional materials 

  • Advertising 

  • Participating in exhibitions and related expenditures 

  • Establishing and optimizing company web pages 

  • Mobile application for promotional purposes 

  • Testing and certification services 

  • Applying for product patent, trademark registration, or copyright protection 

 

SME Export Marketing Fund 

The SME Export Marketing Fund (EMF) was set up to assist small and medium enterprises in Hong Kong to expand to overseas markets. 


This government program helps companies carry out “export promotion activities,” including attending exhibitions in Hong Kong and overseas, conducting business missions, doing advertising and setting up or upgrading web pages and mobile applications.  


International markets should be the main target. However, between April 30, 2021, and June 30, 2026, the eligible activities have been expanded to include large-scale exhibitions targeting the local HK market as well. During this period, some larger companies may also apply. 


Companies in the program can be reimbursed 50% of the approved expenditures for activities, up to HK$100,000 per application. Each company can receive up to HK$1 million (US$128,031) in funding. For projects related to establishing or upgrading company websites or mobile applications, the cumulative funding cannot exceed 50% of the total expenditure. 

 

Innovation and Technology Fund 


The Innovation and Technology Fund (ITF) is a government scheme under the Innovation and Technology Commission (ITC) that provides funding for activities related to technology and R&D. 

Programs included in the ITF target: 

  • Supporting R&D; 

  • Facilitating technology adoption; 

  • Nurturing technology talent; 

  • Supporting technology startups; and 

  • Fostering an innovation and technology (I&T) culture. 

 

Funding schemes to support R&D 


The ITF programs support local research and development (R&D) and are available to a variety of applicants, including R&D centers, local public research institutes, and locally registered companies. 


Some of these programs include: 


  • Innovation and technology Support Program (ITSP) – Industry oriented R&D  

  • Mainland HK Joint Funding Scheme (MHKJFS) – Collaborative R&D projects with mainland China 

  • Enterprise Support Scheme (ESS) – In-house R&D work  

  • R&D Cash Rebate Scheme (CRS) – R&D ITF funded and partnership projects (funded by local enterprises) 

 

Funding schemes for technology adoption 


These schemes seek to promote the adoption of technology by local companies and the public sector. 


The Technology Voucher Program (TVP) is popular due to its broad scope of eligibility and is particularly helpful for SMEs, which can use the funds to upgrade or launch new IT systems, for instance. 


Non-listed companies registered or incorporated and registered in Hong Kong, with substantive business operations in the city, are eligible to apply. 


The New Industrialization Funding Scheme (NIFS) help subsidize manufacturers looking to set up new smart production lines in Hong Kong. All or a significant portion of the production line for which the company is applying for funding should fulfill the “smart manufacturing” criteria. 


The Public Sector Trial Scheme – ITF Projects (PSTS-ITF) funds completed ITF R&D projects undertaken by R&D centers and designated local public research institutes. The program pays up to 50% of the actual cost of the original R&D project; up to 100% for projects initiated by R&D centers. 

 



Funding schemes to nurture technology talent 


These programs support local talent and help them gain useful experience. They also help companies recruit and train technology employees. They include both funded internship schemes for locally enrolled students, as well as the employment of skilled talent and training. 


Some of these schemes are:  


  • New Industrialization and Technology Training Program (NITTP) - Training for staff in advanced technologies, especially those related to “New Industrialization”. 

  • STEM Internship Scheme - Providing STEM students with innovation and technology (I&T)-related work experience during their studies. Newly created or existing in-house internship programs of the companies, with a duration of at least 28 days offering meaningful I&T-related work. 

  • Research Talent Hub for Technology Companies Conducting R&D Activities in Hong Kong (RTH-TC). 

 

Funding schemes for startups 


Several ITF schemes provide direct funding to Hong Kong-based startups. These include a co-investment scheme to attract venture capital (VC) investment in local startups and a university funding scheme to help students and faculty set up new businesses. 


The Innovation and Venture Fund (ITVF) is aimed only at local startups, with participation from selected VC funds. 


The Research, Academic and Industry Sectors One-plus Scheme (RAISe+) funding is provided through one of the six universities. While the applicants must be affiliated with one of these six universities, the program is open to both local and foreign faculty and students. 

 

SME Financing Guarantee Scheme 


This program is a loan matching scheme carried out by the Hong Kong Mortgage Corporation Limited Insurance Limited (“HKMCI”), a wholly owned subsidiary of the Hong Kong Mortgage Corporation Limited (HKMC). 


The scheme helps SMEs and non-listed companies receive financing from approved participating lenders to meet business needs. 


The HKMCI currency provides guarantee coverage ranging from 50 to 100% credit facilities of eligible companies. Initially only providing 50, 60, or 70% coverage guarantees, the scheme was expanded to provide 80, 90, and 100% guarantee products, although it was set to expire in 2023. 


Hong Kong extended the 80/90/100% coverage guarantee until the end of March 2024. The 50/60/70% guarantee products will continue to be in place after this date. 


Companies must meet the following criteria to apply: 


  • Be a company, sole proprietorship, partnership, or unincorporated body of persons that is registered in and has business operations in Hong Kong; 

  • Cannot be carry on the business of a lender or otherwise provide funds available for borrowing in any way; 

  • Not be an affiliate of the lender, and not be a listed company or corporation. 

 

 


 

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Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.

 

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