BUD Fund Hong Kong

Most founders choose Hong Kong for 0% offshore tax. Some choose it for 8.25% onshore — and the funding that comes with it.

The BUD Fund is a Hong Kong government matching grant that pays 25% of approved costs (1:3 ratio) for non-listed Hong Kong companies to build brands, upgrade operations and promote sales in the Chinese Mainland and 47 FTA/IPPA economies. The cumulative ceiling is HK$7 million per company. It is administered by the Trade and Industry Department with HKPC as Secretariat.

Hong Kong taxes the first HK$2 million of onshore profits at 8.25%, with no VAT, capital gains or dividend tax. Companies that operate here, rather than claim offshore status, also qualify for the BUD Fund. Every BUD project ends with an audited expenditure statement reviewed line by line. The audit fee is fundable at the same ratio, and Get Started HK’s auditing services can handle it.

Key Takeaways: 

• The Hong Kong government provides over 70 funding programs, offering millions in grants to help businesses scale across Mainland China and global markets.
• Cumulative ceiling: HK$7,000,000 per enterprise across a maximum of 70 approved projects.
• Payment: 20% initial payment for General/E-commerce Easy; Easy BUD is reimbursement-only.
• The SME Export Marketing Fund (EMF) has been consolidated into the BUD Fund. Enterprises can continue to make good use of “Easy BUD” to participate in exhibitions and activities targeting markets outside Hong Kong.
• Hong Kong offers a world-class business environment offering a territorial tax system with potential 0% offshore tax, 100% foreign ownership, and a rapid incorporation process.

The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) is Hong Kong’s principal government grant for SMEs expanding into the Chinese Mainland and FTA/IPPA markets. Each non-listed Hong Kong company can receive up to HK$7 million cumulatively, with the government funding up to 25% of approved project cost (1:3 matching). Since 1 July 2026 it also absorbs the former SME Export Marketing Fund.

What the BUD Fund Gives You

Item	Details (updated in 2026)
Administering body	Trade and Industry Department
Established	June 2012
Cumulative ceiling per enterprise	HK$7,000,000
Maximum approved projects per enterprise	70
Per-project cap: General	HK$800,000
Per-project cap: E-commerce Easy	HK$800,000 (HK$1,000,000 sub-ceiling within the HK$7M)
Per-application cap: Easy BUD	HK$150,000 (from 15 June 2026)
Concurrent approved funding cap	HK$800,000 at any one time
Initial payment	20% of approved grant (General, E-commerce Easy); none for Easy BUD
Easy BUD application frequency	One every 3 months
Easy BUD project duration	12 months, no extension
Processing pledge	30 working days (Easy BUD); 60 working days (other streams)
Total government commitment	Over HK$10 billion after 2026-27 Budget injection

What the BUD Fund Pays For

The fund has three purposes, each tied to a target market outside Hong Kong.

1. Branding
Brand strategy and positioning, brand identity design, trademark registration in target markets, brand promotion campaigns.

2. Upgrading and restructuring
Production or service upgrades, management systems, IT and e-commerce systems, product certification for target markets, and (since March 2025) professional fees for establishing a new business entity in an eligible market.

3. Promoting sales
Market research, participation in exhibitions and trade fairs, advertising, online sales platforms and marketplace onboarding, sales channel development, and (since 1 July 2026) the export promotion activities formerly funded by the EMF.

Target markets
The Chinese Mainland and every economy that has signed a Free Trade Agreement and/or Investment Promotion and Protection Agreement with Hong Kong. Before June 2026 this covered 39 economies representing more than 80% of Hong Kong’s goods trade. On 15 June 2026 eight further economies were added: Saudi Arabia, Bangladesh, Egypt, Hungary, Pakistan, Kazakhstan, Mongolia and Brazil

How the Money Works

The 1:3 matching ratio

For every HK$3 your company spends on approved costs, the government contributes HK$1. Your company must fund at least 75% of approved project cost in cash. The ratio also applies to audit fees.

Eligibility Criteria for the BUD Fund

An enterprise had to meet all of the following:

1. The company is not listed on any stock exchange.
2. It has substantive business operations in Hong Kong. 
3. The project relates to your own business development in one or more target markets.
4. The project has not started before approval (unless you file the early-commencement declaration and accept the risk) 
5. No project cost is funded by another Hong Kong public scheme.
6. You can fund 75% of project cost in cash and wait for reimbursement.

BUD Fund: The Numbers That Matter (2026)

What founders ask:	What the latest data says:	Official source
Total approved since 2012	HK$7.9bn / ~12,800 projects	LC Paper No. CB(2)309/2026(05)
Average grant per project	~HK$617,000	LC Paper No. CB(2)309/2026(05)
Actual avg. processing time	30/60-day pledge	TID Controlling Officer’s Report
Projects needed to hit HK$7M ceiling	≥ 9 at the HK$800k cap	–

Offshore-claim vs BUD decision

Factor	0% offshore claim	BUD-eligible onshore structure
Profits tax	0% on offshore-sourced profits (if accepted by IRD)	8.25% first HK$2M, 16.5% thereafter
Evidence you must show	Operations, contracts and decisions outside Hong Kong	Operations, staff and management inside HK
Local employee / MPF	Weakens claim	Strengthens eligibility
Bank account activity	Neutral	Evidence
Government grants accessible	Effectively none	BUD, CreateSmart, TVP etc.
Audit exposure	IRD offshore-claim review	BUD project audit (per project)
Best fit	Trading/holding, no HK team	Brand owner selling into Mainland / FTA markets

The Hong Kong Advantage: Planning Your Company for BUD Eligibility

If accessing the BUD Fund is part of your reason for incorporating in Hong Kong, the decisions made at formation matter:

• Registered address vs operational premises — A registered address satisfies the Companies Ordinance; it does not evidence substantive operations. Budget for a coworking desk, serviced office or lease.
• Local bank account —Grants are paid to the applicant’s bank account, and account activity is primary evidence of operations. See our bank account opening support.
• Payroll and MPF —At least one Hong Kong-based employee enrolled in MPF is the clearest signal of local operations. See Retirement Fund MPF in Hong Kong.
• Tax position —Decide early whether you will pursue an offshore profits claim. See the eligibility section above.
• Bookkeeping from day one —BUD audits are line-item reviews. Clean books from incorporation make the final claim straightforward. See our accounting services.

Hong Kong offers 100% foreign ownership, no minimum capital, no resident-director requirement, incorporation within days, and a company register that passed 1.55 million entities at end-2025. The BUD Fund is one of the few government grants globally that a foreign founder can access within months of incorporation.

Hong Kong is a premier destination for offshore company formation. It serves as an efficient gateway to the Chinese market and offers a territorial tax system where offshore profits can qualify for a 0% offshore tax rate.  By the end of 2025, the number of companies registered in Hong Kong reached an all-time high of over 1.55 million. Businesses can be incorporated in just a few days with 100% foreign ownership, minimal paperwork, and no restrictions on capital flow.

For those who want to know about how to choose a good company formation agent in Hong Kong, you can refer to our blog – Chapter 7 How To Choose a Reputable Licensed Agency.  If you are ready to start a business registration in Hong Kong, you can also contact our Hong Kong incorporation team at info@getstarted.hk.

Common Reasons Applications Fail or Are Reduced

1. Costs incurred before approval without the early-commencement declaration.
2. Project targets Hong Kong customers. Every component must relate to a Mainland or FTA/IPPA market.
3. Weak evidence of Hong Kong operations. Registered address and nominee director only.
4. Insufficient quotations or quotations from related parties.
5. Vague KPIs. “Increase brand awareness” is rejected; “secure three distributor agreements in Guangdong within 12 months” is accepted.
6. Duplicate funding. Same cost claimed under another scheme (e.g. CreateSmart, or a legacy EMF application).
7. Exceeding the HK$800,000 concurrent cap with a live project already approved.
8. Easy BUD project run by a subsidiary. Easy BUD must be implemented by the applicant itself.
9. Missing or late final report and audit. Grant is forfeited if deadlines are missed without approved extension.

Frequently Asked Questions about BUD Fund