If you are a small business or a medium sized business looking to expand your presence offshore by exporting, the export market development grant is especially designed to help you do that.
How much is the Export Market Development Grant?
The maximum grant payable is $770,000 over an 8 year period. It is capped at 50% of the promotional costs paid by your business during that time.
The grant has three different tiers and three different levels of funding.
The first tier for the EMDG is for first time exporters that are now ready to export. The grant for tier one applications for the export market development grant is capped at $80,000 over two years (so $40,000 per year).
The second tier of applicants for the Export Market Development Grant is for expanding familing businesses. These businesses are expanding their export promotional activities and the grant is capped at $240,000 (so over three years at a maximum of $80,000 per year).
The third tier for the Export Marketing Development Grant is where your export business is looking at making a strategic shift like targeting a new market or a new customer base. This payment is capped at $450,000 spread over 3 years with a maximum payment of $150,000 per year.
What are promotional activities?
Given that the grant is paid at the rate of 50% of monies spent by a family business on promotional activities it is important to note that “promotional activities” are for the purposes of applying for the Export Market Development Grant. Eligible promotional activities can include:
1. Providing free samples
2. Maintaining a representative in another country.
3. Short trips within Australia
4. Short trips to another country
5. Getting ready for export (if you are tier one)
6. Producing and providing advertising material
7. Engaging a consultant to research other markets
8. Foreign buyer visits
Are there any exclusions on promotional activities?
If your services are focused on migration, student work visas, adoption or complying with Australian laws they do not qualify for the export market development grant. Further, the remuneration of an employee who is ordinarily employed by the family business, or the remuneration of a person related to the family business does not qualify as an eligible expense.
The daily travel allowances allowed for with the Export Market Development Grant are the upper limit of those allowed by the Australian Tax Office.
Costs associated with developing an export market in New Zealand do not qualify. Neither do exports to other states within Australia.
And if the costs are associated with importing products, or exporting mainly imported products, these promotional costs will not qualify for the export market development grant.
Do I qualify for the EMDG?
To qualify for the EMDG you must have an Australian ABN and have a turnover of less than $20m.
You must also be producing goods or services that are mainly of Australian origin for export. This can include knowhow and software.
How do I apply for the Export Market Development Grant?
The application process for the EMDG is run by AusIndustry and you must complete the application form. The application form must include a plan to market your product. This document can be your marketing roadmap, a one page statement or your internal planning document that shows how you are planning to attack your target market.
To date, our clients who have applied for the EMDG already have a marketing plan on hand for their target market and they have not had to prepare a plan simply to obtain a grant. And these plans typically discuss what your budget will be, how you will measure the success (or failure) of your budgeted spend, your target market, business goals and why you are doing the overall marketing in the first instances.
Who can help me apply for a grant?
The team at Ausindustry and the Ausindustry website has a wealth of information on how to apply for the grant and they are ordinarily the primary source of help our clients use when applying for a grant.
There are also accredited grant advisors registered with AusIndustry that can help you apply and lodge the grant application (Westcourt is not an accredited grant agent).
At Westcourt we have seen many of our clients successfully enjoy the Export Market Development Grant. And the expansion into offshore markets by global families is a natural step for many business families. We can assist global families export and expand offshore through our affiliation with GGI Global – an international network of over 30,000 accountants and lawyers so you can enjoy a single source of advice internationally with local, on the ground knowledge from trusted operators in their field.
With an office in each country that is independent and tailored for their market Westcourt is a natural choice for business focused families seeking to expand and grow their offshore presence – so why not call us to see how we can help?
