Running a small business in Hong Kong or looking to start one there? Given that it is consistently ranked among the top in the world for economic competitiveness and has a straightforward business incorporation process that can be completed in five to seven days, Hong Kong is a popular destination for business owners.
Related reading: 5 reasons to set up your business in Hong Kong
These business benefits are not just limited to large MNCs and other big businesses. Small businesses also stand to benefit, what with a slew of resources and grants that the government provides for small businesses. Here, we identify the top 5 government grants for small businesses, so make sure you don’t miss out!
In his 2017 Policy Address earlier this year, Chief Executive CY Leung announced that the government had invested $18 billion on measures to attract innovation and technology enterprises from Hong Kong and elsewhere. The Innovation and Technology Fund (ITF) ( one of the government business grants) that which is administered by the Innovation and Technology Commission introduces a range of support schemes to strengthen productivity and competitiveness among Hong Kong companies.
TF is a fund set up by the Government to support mainly applied R&D projects conducted by universities, industry support organisations, industry & trade associations or private sector companies which contribute to innovation and technology upgrading in industry in Hong Kong.
The following are the programmes and schemes under the ITF –
The Social Innovation and Entrepreneurship Development Fund (SIE Fund) provides resources to organisations that address poverty and social exclusion through innovative solutions. The government business grants -SIE Fund is allocated through a number of different intermediaries which administer programmes in the priority areas of Capacity Building and Innovative Programmes.
The SIE Fund has engaged The Hong Kong Council of Social Service, PolyU Technology and Consultancy Company Limited, SOW (Asia) Foundation Limited*, and The Yeh Family Philanthropy Limited as intermediaries to design and administer various programmes for the Fund’s priority areas of Capacity Building and Innovative Programmes.
Theme: Linking up social capital and helping social enterprises, organisations and social entrepreneurs develop business skills, identify opportunities and apply business approaches to address social needs.
Eligibility: NGOs, social enterprises, companies and Hong Kong citizens aged 18 and above are all welcome.
Theme: Helping you apply “Design & Technology” to generate idea; providing funding of HK$100,000 and mentoring to implement project.
Eligibility: This Programme welcomes students and graduates of local higher education institutions to apply as individuals or in teams.
Theme: A structured 3-month programme to support early stage social enterprises seeking to grow and scale their impact on poverty alleviation in Hong Kong.
Eligibility: The programme is looking for social enterprises that:
The Programme: The programme consists of diagnostic/facilitation workshops, mentoring, networks and pitch nights to provide participating social enterprises with access to potential investors.
*SOW (Asia) Foundation Limited completed its service as an intermediary of SIE Fund in August 2016.
Theme: Visionary and resourceful social entrepreneurs can think out of the box and take calculated risks in creating new business models, market norms and customer experiences. Venture philanthropy takes philanthropic funding to a whole new level of accountability and results-orientation, giving investors alternative opportunities they seldom enjoy before.
Combining the merits of the two, this course is specially designed for students with a vision in innovative, sustainable and impactful social businesses.
Eligibility: MBA students and undergraduates
Intellectual property (IP) is a core asset of every business and has the potential to become one of the most valuable assets of your business when managed properly. Under the Patent Application Grant, the Innovation and Technology Commission with Hong Kong Productivity Council (HKPC) assists local companies and individuals to apply for patents of their own inventions. It is a Government support for small business. All applications for functional patents and inventions with technological elements and industrial application are eligible. Under this grant, a company can receive a grant of up to HK$250,000 or 90% of the sum of the total direct cost of the patent application and the administration fee charged by the HKPC, whichever is lower.
The Grant aims to encourage local companies and inventors to capitalise their intellectual work through patent registration.
Applications will be processed through the implementation agent on a confidentialbasis. Applicants must provide the implementation agent with details of their idea or inventions. A patent search-cum-technical assessment will be required. Based on the result of the patent search-cum-technical assessment conducted by the implementation agent, the Innovation and Technology Commission will decide whether the applications should be approved. The Commission’s decision will be final.
Afraid that your business has got everything going for it only to be badly hit by the next economic downturn? This is a valid concern, given that SME loan applications fell by 37% in the first half of 2016 amidst the economic slowdown. The government has helpfully put together various resources and funding schemes to support SMEs in exactly this type of scenario. It is a part of SME funding in Hk by government.
One of these funding schemes, the SME Loan Guarantee Scheme (SGS) provides loan guarantee to SMEs to aid them in securing loans from participating lending institutions (PLIs), which includes commercial banks, for acquiring business equipment or meeting general working capital needs. Under the scheme, the government provides a guarantee to the PLIs so that they can lend money to SMEs which do not have sufficient assets to secure bank loans. Small and medium business can take advantage from Government small business loan guarantee scheme.
The SME Loan Guarantee Scheme (SGS) provides loan guarantee to small and medium enterprises (SMEs) to help them secure loans from the participating lending institutions (PLIs) for acquiring business installations and equipment or meeting working capital needs of general business uses.
Enterprises(1) which meet the following criteria are eligible to apply for Government small business loan guarantee scheme:
“Enterprise” refers to a legal entity which is engaged in any form of business for the purpose of gain. Non-profit-making or non-profit-distributing organisations are not eligible.
(2) Substantive Business Operation
To be eligible for the SGS, an enterprise should have substantive business operation in Hong Kong. A business holding a shell business registration or having most of its main business operation outside Hong Kong will not be regarded as having substantive local business operation.
For details about the requirement, please refer to the “Guidelines on the requirement of “substantive business operation”” issued by the TID.
An SME is a manufacturing business which employs fewer than 100 persons in Hong Kong; or a non-manufacturing business which employs fewer than 50 persons in Hong Kong.
“Number of persons employed” shall include proprietors/partners/shareholders actively engaged in the work of the business, and all salaried employees of the enterprise at the time of submitting applications. Such employees, including full-time or part-time salaried personnel, both permanent and temporary, must be directly paid by the enterprise.
The SME Export Marketing Fund (EMF) provides financial assistance to SMEs participating in export promotion activities in order to encourage SMEs to expand their markets beyond Hong Kong. For each grant that covers one export promotion activity, your business can get up to 50% of the total approved expenditure incurred or $50,000, whichever is less. Each business may receive up to $200,000 of EMF grants altogether, and there is no limit on the number of applications each business can submit.
The SME Export Marketing Fund (EMF) aims to encourage small and medium enterprises (SMEs) to expand their markets outside Hong Kong by providing financial assistance to SMEs for participation in export promotion activities.
An enterprise1 applying for a grant under EMF must fulfil the following requirements:
Trade and Industry Department (TID) reserves at all times the absolute right to determine the eligibility of an enterprise applying for EMF grants.
Do you tap on any government grants for small business that are missing from this list?
Let us know in the comments below!