Government grants are always an attraction for business and the benefits to cash flow while developing international markets is often critical. Here are some steps to ensure you’re eligible for an export grant.
It is critical for businesses considering applying for an export grant to research the grants available to ensure that they are eligible, and that they can satisfy any specific requirements attached to receiving the grant. Businesses that do not undertake this research often find they have spent considerable time and money lodging applications, only for the application to fail or be substantially under the amount expected.
By understanding the requirements of the various export grants businesses will:
- Not waste time lodging applications where the business is not eligible to receive a grant.
- Ensure they have the required documentation to satisfy the criteria for receiving grants.
- Have a smoother processing of their application.
- Receive their grant quicker.
The Commonwealth and state governments provide export grants. Start with the websites of the Commonwealth and state governments, or contact your local Austrade office or the relevant state department responsible for export. Good sources of information are also available from the Australian Institute of Export or an export grants consultant.
The EMDG
The main export grant is the Export Market Development Grant (EMDG), administered by Austrade on behalf of the Commonwealth Government. This program provides grants to reimburse international marketing expenses for the promotion of Australian products. Eligible businesses are entitled to receive 50 percent reimbursement of eligible expenses above $10,000, with a maximum grant of $200,000 per annum.
Other export grants provided by various state governments are generally complementary to EMDG, providing comparatively limited financial support and are focused on a narrower band of businesses.
Businesses—sole traders, partnerships or incorporated entities, including associations and cooperatives—with an Australian business number (ABN) are eligible to receive EMDG support, excepting those with a turnover of more than $50 million and/or those which have previously received eight or more EMDGs.Generally, to be eligible receive EMDG, businesses must be the principal in the sale of Australian products. This means agents that market, but do not actually sell, Australian products to the overseas buyer are not eligible to receive EMDG.
First-time EMDG applicants must pass a grants entry test to ensure that the business has prospects of success in its export endeavours. It is advisable to discuss this requirement with Austrade or an export consultant if you are uncertain how this might impact on your ability to claim EMDG.
Businesses are able to claim two grants without having generated any export sales. Once the first two grants have been received, however, EMDG applicants are subject to an export performance test, which varies according to the number of grants received. In general, the grant amount would be reduced if the level of export sales does not exceed the amount required by the export performance test.
Eligible businesses must promote eligible products to receive EMDG. Eligible products are goods, services, intellectual property and know-how substantially of Australian origin. This includes Australian primary products that are mined, harvested, raised or fished within Australia, goods made mainly from Australian primary products—for example wine bottled in Australia from Australian grapes or wine bottled overseas using Australian bulk wine—and goods that are manufactured or assembled in Australia. It is the responsibility of the business applying for EMDG to prove this.
Additionally, goods made outside Australia where there is a significant net benefit derived by Australia from their sale outside Australia may be accepted as an eligible product. Austrade expect a substantial benefit to Australia from these products before accepting them as eligible, so it is advisable to seek professional advice when lodging an EMDG application in these circumstances.
Services provided to non-residents of Australia are generally accepted as eligible, except for those specifically excluded by the EMDG legislation, such as business migration. Eligible services include architects, engineers, management consulting, education, tourism and advertising, for example. Accountancy and legal services may be eligible depending upon the service provided.
Intellectual property, including software, and know-how that has been substantially developed from research or work done in Australia qualify as eligible products.
Only certain expenses are allowable for EMDG. Expenses must be for marketing the business’ eligible products internationally. Where an expense is for both marketing and non-marketing activities, the expense must be apportioned to claim only the international marketing component. Expenses related to marketing to New Zealand are not eligible.
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information rearding export grant.