The Export Market Development Grant (EMDG) program is a flagship initiative by the Federal Government designed to support Australian small and medium enterprises (SMEs) in promoting their goods, services, and intellectual property in international markets. Recent changes to the program aim to provide increased funding opportunities, though not all applicants will secure a grant.
The earlier version of the grant, Round 4, is closed. The information on Round 5 applications is not yet available, but reviewing the background of Round 4 of the Export Market Development Grant will give insight into how the grant works and how your Perth Business Accountant can help you prepare.
EMDG Funding Availability
The EMDG program substantially assists eligible Australian family-owned SMEs with annual turnover between $100,000 and $20 million. Key features include:
- Reimbursement of Up to 50% of Eligible Costs: Businesses can recover half of their expenditure on activities that develop export opportunities.
- Maximum Funding of $770,000 Over Eight Grants: Subject to eligibility criteria, SMEs can access eight grant rounds.
Representative bodies assisting Australian SME members in export-related activities, including marketing and export training, are also supported. Grant year limits or minimum capacity-to-spend thresholds do not restrict these bodies.
The Federal Government has allocated $104.5 million in funding for the 2025–26 and 2026–27 financial years, underscoring its commitment to bolstering Australia’s export sector.
The grant will not cover the advice cost for international tax services.
Grant Agreements
To enhance clarity and certainty, applicants will receive an upfront grant agreement outlining the support available for their offshore marketing activities. These agreements assure funding whether businesses promote their offerings overseas or protect their intellectual property (IP).
Key Updates for EMDG’s Round 4
Austrade has revised the Export Market Development Grant program following extensive stakeholder consultation. Notable changes for Round 4 include:
- Application Process:
- Applications are assessed on a first-come, first-served basis until funds are fully allocated. Once all funding is committed, the grant round will close.
- Round 4 covers the 2025–26 and 2026–27 financial years, with approximately 1,900 grants expected to be distributed across the three funding tiers.
- Minimum Expenditure Requirements:
- Applicants must demonstrate the ability to spend at least $20,000 per financial year on marketing and promotional activities, excluding the grant amount.
- Eligible applicants are expected to plan for $40,000 in total annual expenditure ($20,000 of their funds plus the $20,000 minimum grant).
- Eligibility Criteria:
- Applicants in tiers 1, 2, and 3 must have operated under the same Australian Business Number (ABN) for at least two years.
- Each tier now includes specific annual turnover thresholds and limits on the number of years it can be accessed.
- Tier 3 is now focused on helping businesses enter a specified list of new export markets.
- Grant Compliance:
- If applicants fail to meet the minimum spending requirements within a financial year, they will forfeit the grant.
- Transparency:
- Grant recipients will be publicly listed on Austrade’s website within 21 days of the grant’s effective date, ensuring transparency and accountability.
Opportunities for SMEs
With the recent changes, the EMDG program presents a valuable opportunity for SMEs to expand internationally. However, businesses must meet stricter eligibility and spending requirements, plan their export strategies meticulously, and submit applications promptly to maximise their chances of receiving funding.
For assistance navigating the EMDG program or preparing your application, professional advice can ensure compliance and improve funding outcomes.
Grant Funding Tiers
The Export Market Development Grant has three funding levels (or three tiers) and assists industry bodies that help their members export. The funding allocation varies for each round.
Tier One: These are for businesses that are ready to export.
A tier 1 grant will range from $20k to $30k annually. The annual business turnover must be over $100k and less than $20m.
Tier Two: These are for businesses that are exporting within existing markets.
A tier 2 grant will range from $20k to $50k annually. The annual business turnover must be over $500k and less than $20m.
Tier Three: These are for businesses exporting to new key markets.
A tier 3 grant will range from $20k to $80k a year. The annual business turnover must be between $1m and $20m.
What Costs Can You Claim Under the EMDG Program?
The Export Market Development Grant (EMDG) program offers Australian businesses financial support to offset eligible expenses incurred while promoting their goods, services, or intellectual property in international markets. Eligible expenditure categories, subject to meeting program requirements, include:
- Engagement of Overseas Representatives
Costs associated with appointing representatives to promote your business overseas.
- Utilisation of Marketing Consultants
Fees for external consultants assisting with export marketing strategies and activities.
- Costs of Marketing Visits
Expenses incurred during international or domestic trips to promote your products or services in export markets.
- Participation in Trade Fairs and Seminars
Fees and associated costs for attending or exhibiting at trade fairs, seminars, or similar events designed to develop export opportunities.
- Promotional and Advertising Materials
Expenditure on materials and campaigns designed to raise awareness and generate interest in your offerings among international audiences.
- Hosting Overseas Buyers
Costs for bringing international buyers to Australia, including travel and accommodation expenses, to showcase your products or services.
- Free Product Samples
Expenses for providing free samples to potential buyers, subject to a $15,000 limit.
- Intellectual Property (IP) Registration Costs
Costs related to registering trademarks, patents, or other IP in overseas markets to support your export activities.
- Marketing Training (for Tier 1 Applicants and Representative Bodies)
Fees and expenses associated with training activities to enhance export marketing capabilities.
Maximising Your Claim
To maximise the benefits of the EMDG program, ensure that all claimed expenses are directly related to your export marketing activities and meet the program’s eligibility criteria. Proper documentation and records are essential to support your claim.
If you need further assistance with your EMDG application or advice on eligible costs, consult a qualified advisor to ensure compliance and maximise your grant potential.
The Tax Impact of the EMDG
The receipt of the EMDG will be taxable income to the family-owned SME. The costs associated with the grant and incurred by the business will generally be tax deductible, so they will offset each other.
If you are exporting, the sale of exported goods is generally GST-free. However, navigating how GST works with offshore purchases and sales is essential before exporting for cashflow management reasons.
Conclusion
Understanding how the government helps and supports the business is the cornerstone of Westcourt – be it through grants, cutting red tape, or tax incentives, we are well placed to get you there. As a firm only focused on family-owned enterprises, we understand the unique challenges founder-led SMEs have when it comes to making their business thrive, and coupled with our passionate independent approach, award-winning technical advice and deep global network – we are the natural choice when choosing an advisor – so why not give us a call?
