Being the second freest economy on the planet, Hong Kong has a deserved reputation for being a hub for global big business, connecting the West to the East. What is not so well known however, is that Hong Kong also actively encourages the growth of small to medium enterprises (SMEs), both local and foreign owned.
To do so, the Hong Kong Government has created several grants to fund, foster, and support SMEs to become successful within the Hong Kong Economy. We take a look at the 5 top government grants that help you build and grow your SME in Hong Kong.
1. Support for Business Downturn
While a strong and robust economy, Hong Kong is not completely immune to periods of downturn, and so the government provides support to SMEs who are struggling during such times.
Under the Support for Business Downturn Scheme, there are a number of individual funds and initiatives to help SMEs come out the other side of a business downturn — one of which is the SME Special Loan Guarantee Scheme (SGS).The SGS will provide loan guarantees to SMEs to help them secure business loans from participating lending institutions (PLIs).
To qualify for the SGS, you must be registered under the Business Registration Ordinance, be operating in Hong Kong, and recognised as an SME. You can also not be an associate of your chosen lender, or be doing the business of a lender.
The scheme also goes beyond loans for business downturn, and provides services such as matching your business with other businesses that could build trade, and full access to the government’s market intelligence analysis so you can make informed business decisions.
Related Read: How Hong Kong government is supporting local businesses amid COVID-19 »
2. Innovation and Technology Fund (ITF)
Hong Kong has long prided itself as a hub for technological innovation, and therefore provides excellent support for those businesses wishing to add value to the economy through high-tech transformation. To be precise, Hong Kong has dedicated $18 billion to the Innovation and Technology Fund (ITF) since its announcement in 2017.
The ITF is designed to mainly support R&D projects done through local universities, industry and trade associations, and private sector companies. Essentially there is a reasonably wide scope for funding, as long as the fundamental premise of the initiative is to upgrade the technology industry within Hong Kong.
Within that wide gamut of funding possibilities are the following separate grants that fall under the ITF umbrella:
- Innovation and Technology Support Programme (ITSP)
- Partnership Research Programme (PRP)
- Guangdong-Hong Kong Technology Cooperation Funding Scheme (TCFS)
- Reindustrialisation and Technology Training Programme (RTTP)
- Researcher Programme
- Midstream Research Programme for Universities (MRP)
- Public Sector Trial Scheme (PSTS)
- Technology Voucher Programme (TVP)
- Technology Start-up Support Scheme for Universities (TSSSU)
- Postdoctoral Hub
- Patent Application Grant (PAG)
- Enterprise Support Scheme (ESS)
- The Innovation and Technology Venture Fund (ITVF)
- General Support Programme (GSP)
- Research and Development Cash Rebate Scheme (CRS)
Best of all, you can apply for multiple of the above schemes at the same time, and there are no application fees required.
3. SME Export Marketing Fund (EMF)
When it’s time for your business to expand overseas, the Hong Kong Government is motivated to see you succeed, and so they created the SME Export Marketing Fund (EMF). The EMF can provide exporting SMEs up to 50% of total costs, or $50,000, whichever is less. Best of all, each exporting SME can receive up to $200,000 of EMF funding, so you can apply more than once.
Being such a generous initiative, there are more caveats to adhere to:
- The SME must be registered in Hong Kong under the Business Registration Ordinance.
- The SME must meet the Government’s definition of an SME, e.g. employ less than 50-100 people, depending on your industry.
- The SME must do the majority of its business within Hong Kong.
- If the SME has already received EMF grants, the total amount of received grants must not be more than the total grant ceiling of $200,000.
- The SME must not be, or not be related to the exporter covered by the application.
4. Social Innovation and Entrepreneurship Development Fund (SIE Fund)
The Social Innovation and Entrepreneurship Development Fund (SIE Fund) is dedicated to supporting organisations who aim to address social exclusion and poverty amongst Hong Kong residents.
The SIE has a range of sub-programmes that address specific concerns related to social development in Hong Kong, each supported by a specific organisation. Here are just a few of them:
Nurturing Social Minds
Nurturing Social Minds is supported by Yeh Family Philanthropy Ltd, and allows students to work with social organisations that address social and business problems in the community. This allows the students to take risks and apply for funding that would not normally be available to new initiatives.
To be eligible, applicants should be either undergraduates or MBA students of a higher education institution.
Supported by the Hong Kong Council of Social service, the Impact Incubator is designed to be a one-stop-shop to support social enterprises who aim to do good for the community. Objectives can range from addressing social needs, developing business skills for social organisations, and identifying new opportunities and initiatives for social change.
To be eligible for the Impact Incubator, you can be a Hong Kong citizen (over the age of 18), company, social enterprise, or NGO.
With the support of PolyU Technology and Consultancy Co Ltd, Good Seed helps people generate design and technology ideas that will benefit society. Mentoring and funding of up to $100,000 is available to students and graduates of higher education institutes such as polytechnics or universities.
There are actually even more grants available under the SIE Fund, and they have funded over 166 programmes as of March 2020. We’d encourage you to check out the SIE Fund page for more information.
5. Patent Application Grant
Being a long respected incubator of innovation, the Hong Kong Government created the Patent Application Grant to help local companies and individuals navigate the patent application process for their new inventions. Under the grant, a company or individual can receive up to $250,000 in funding, or 90% of the total cost of patent application.
To be eligible, you can be an incorporated Hong Kong company, permanent Hong Kong resident, or Hong Kong resident permitted to stay in Hong Kong for more than 7 years, and have never owned any patents before.
Conclusion — Where to next for SME Government Funding in Hong Kong
The Hong Kong Government is so proactive in its support for the growth of SMEs that you might not know which grant or initiative is the best for you. If you’d like some help figuring out how to optimise and fast track your grant application processes, we have the expertise to assist you.
As Hong Kong’s premiere business incorporation service provider, HKCR knows how to maximise your chances of success in your government grant applications, and create genuine prosperity beyond that. If you’d like any advice on getting government funding for your SME, please do contact us, it’s both our job and pleasure to help.
- What Hong Kong government grants are available for SMEs/ Startups?
- The top 5 government grants available are:
- Support for Business Downturn Scheme
- Innovation and Technology Fund
- SME Export Marketing Fund
- Social Innovation and Entrepreneurship Development Fund
- Patent Application Grant
- How does the Hong Kong government support businesses during economic downturns?
- The Hong Kong government has specially created a Support for Business Downturn Scheme to provide support for SMEs during unforeseen economic downturns.
Under this scheme, there are a number of individual funds and initiatives to help SMEs come out the other side of a business downturn — one of which is the SME Special Loan Guarantee Scheme (SGS).The SGS will provide loan guarantees to SMEs to help them secure business loans from participating lending institutions (PLIs).
- What does the Patent Application Grant support?
- The Hong Kong Government created the Patent Application Grant to help local companies and individuals navigate the patent application process for their new inventions. Under the grant, a company or individual can receive up to $250,000 in funding, or 90% of the total cost of patent application.
- Does the Hong Kong government provide funds for business expansion?
- Yes, they do. When it’s time for a Hong Kong business to expand overseas, the government is motivated to see the company succeed, and so they created the SME Export Marketing Fund (EMF). The EMF can provide exporting SMEs up to 50% of total costs, or $50,000, whichever is less. Best of all, each exporting SME can receive up to $200,000 of EMF funding, so it can be applied for more than once.
Pick the Right Partner to Get Government Funding for your SME
HKCR’s team of experts can assist in helping your SME get government funding in Hong Kong.