For many years, Australian businesses that export products or services overseas have been taking advantage of a Federal Government cash rebate known as the Export Market Development Grant (EMDG). The grant isn’t only limited to businesses with established export lines; it’s available to growing exporters and businesses that require assistance in promoting their products to kick start their export journey.. So, if you are considering expanding your business into overseas markets, it might be one for you!
Last year it was announced that the EMDG program would be changing to an upfront eligibility-based grant program, and the new guidelines have recently been released.
Here’s a breakdown of how the changes to the program will continue to help Aussie businesses tackle new export markets, through its new application process that opens on 16 August, so have a read and get ready!
What are the changes to the EMDG program?
Under the revised EMDG program, eligible entities with a turnover of less than $20 million will be able to apply for grants of up to $770,000 over eight years to cover up to 50% of eligible export promotional activities.
The biggest change to the EMDG program is that it is now a forward-funding, upfront eligibility-based grant program, as opposed to a retrospective program. This means that applicants apply for the grant based upon the forecasted promotional costs of their business over the next 2-3 years.
Successful applicants will not automatically be awarded with the maximum grant of $150,000 – applicants will need to apply for the grant under their yearly grant entitlement. The EMDG yearly grant entitlement will determine the amount applicants receive ($40,000, $80,000 or $150,000).
What is the EMDG yearly grant entitlement?
Your maximum grant entitlement for any particular year will be based upon your eligible Tier. You can apply for any tier level that suits your organisation and do not have to proceed through the tiers in any particular order. The tiers are as follows:
Applicants who are new to exporting can receive a maximum grant of $40k per grant year for up to 2 years.
Applicants who are continuing to export can receive a maximum grant of $80k per year for up to 3 years.
Applicants who are making a strategic shift (e.g. a new product or new market) can receive a maximum grant of $150k per year for up to 3 years.
What are the eligible EMDG expense categories?
Eligible cost categories remain somewhat the same as the previous scheme. The eligible cost categories are:
Based in a foreign country for more than 6 months.
Up to 21 days per trip per traveller, covering airfare, accommodation, meals and transport.
Conducting research into foreign markets for eligible product or promotional activity in a foreign country.
Trips within Australia
Up to 21 days, for marketing to foreign buyers.
Overseas Buyer Visits
Internationally or within Australia for up to 21 days so you can undertake promotional activities to market your eligible products to that buyer.
Soliciting for Business in Foreign Countries
Including attendance at trade shows.
Expenses relating to the actual cost of providing product samples free of charge, including postage or freight to deliver samples overseas.
Promotional and Advertising Material
The cost of producing marketing materials such as social media marketing, Google advertising, the design of ads/brochures, TV ads, or international website design and build.
Registering or extending patents and trademarks internationally, including legal fees.
Obtaining training so that you or your staff can better market your eligible products in foreign countries.
How do you apply for the EMDG program?
To apply for the EMDG program, applicants are required to forecast 2-3 years worth of expenses across the eligible categories (as listed in the section below) and submit a Plan to Market. Once all applications have been assessed, Austrade will offer successful applicants with a grant agreement outlining their total grant amount and laying out milestones to receive their EMDG grant.
Your obligation to access your grant payment is to match, at a minimum, 50% of the grant amount you receive, and submit milestone reports in line with your grant agreement.
Applications for FY22 will open on 16 August 2021 and will close on 30 November 2021. If you think that you qualify and would like assistance with preparing your application, please get in touch with our BlueRock Grants and Incentives team for more information.