The Export Market Development Grants (EMDG) program is the Australian Government’s flagship program for supporting SMEs in developing and expanding their export markets. It is an entitlement, eligibility-based and demand-driven program, which is designed to encourage the creation, development and expansion of foreign markets for Australian products.
The EMDG program provides targeted financial assistance, for marketing and promotional activities and the development of marketing skills, to small and medium enterprises (SMEs) with a turnover of less than $20 million, and representative organisations.
What are the relevant dates for each EMDG round?
Second tranche payments are now being made for the 2021 round of the EMDG program. The payout factor is 37.37%, meaning this is the percentage of remaining entitlements that eligible applicants will receive.
Milestone reports for the 2022 round of the EMDG program can be submitted in the new financial year. Eligible applicants with an executed grant agreement will paid within two weeks of submission of a completed milestone report. For assistance with preparation or review of these reports, please contact your local BDO adviser.
Applications for the 2023 financial year grants will open on 6 July 2022 and close on 17 August 2022. As applications are now made prospectively, you must apply now to be eligible for funding for export promotional activities conducted between 1 July 2022 and 30 June 2023.
Are you eligible for the EMDG program?
If you are an SME, you will be able to apply for grants of up to $770,000 per applicant over eight financial years. These grants are for promotional activities to market eligible products - including goods, services, events, IP and software - in foreign countries, or training activities to develop marketing skills. The eight years do not need to be consecutive.
If you have executed a grant agreement for the 2022 financial year, you are not eligible to apply for a 2023 financial year grant.
Which EMDG grant are you eligible for?
The grants will be available in three tiers, which are designed to provide different levels of support as you grow your export markets throughout the different stages of your export journey. In addition, the grant agreements under this program span multiple years, which gives applicants certainty over eligible grant payments for the next two or three financial years.
The three tiers of grants available are:
- EMDG Tier 1 – New to export: This is for eligible SMEs who are ready to begin exporting. These grants are estimated at up to $15,000 per year for two years
- EMDG Tier 2 – Expanding exports: This is for eligible exporters who plan to expand their exporting. These grants are estimated at up to $23,000 per year for three years
- EMDG Tier 3 – Marking a strategic shift: This is for eligible exporters who plan to make a strategic shift in their exporting business. These grants estimated at up to $35,000 per year for three years.
The above grant amounts have been estimated by Austrade based on the high demand for the program, which has resulted in grant amounts being significantly lower than the legislated caps. The maximum legislative funding allowable is $40,000 per year for Tier 1, $80,000 per year for Tier 2, and $150,000 per year for Tier 3. In addition, representative bodies providing training or promotion on behalf of their members are eligible for grants estimated at up to $90,000 per year for three years. The maximum legislative funding allowable is $150,000 per year for 3 years
It is important to note the following:
- Grant recipients must spend at least an equal amount of their own money on eligible expenses
- All applicants will be required to provide a plan to market. This will show Austrade what you intend to do to market your product overseas in the next 2-3 years and why.
What types of expenses are eligible for EMDG grants?
The types of expenses that are eligible under each expense category of the EMDG program are outlined below:
Expense category 1: Maintaining representative in foreign country
Maintaining a representative in a foreign country, for more than 6 months in a financial year, who is either:
- Conducting research into the market in that country for your eligible products
- Undertaking promotional activities to market your eligible products in that country.
This includes expenses such as salary and wages of the representative, office rental costs, education of the representative’s children if relocated for the role, relocation expenses, and recruiting a replacement representative.
Expense category 2: Short trips to a foreign country
Up to 21 days of continuous travel for you or your representative, between Australia and a foreign country. This includes the cost of travel during the marketing visit - e.g. airfares, departure taxes, accommodation expenses, incidentals, ground transport and food.
Expense category 3: Consultants
Engaging a consultant to undertake either:
- Research into the market in a foreign country for your eligible product
- Promotional activities to market your eligible product in that country.
This includes expenses such as original research, export planning and export pricing strategies, and designing marketing materials.
Expense category 4: Short trips within Australia
Up to 21 days of continuous travel within Australia for you or your representative, to undertake activities relating to marketing your eligible product to potential foreign buyers. This includes food, accommodation and ground transport to meet overseas delegates, or foreign residents in Australia, in respect of promoting eligible products. This does not include ordinary remuneration for you or your representative.
Expense category 5: Foreign buyer visits
Up to 21 days of continuous travel between Australia and a foreign country, and within Australia, of a prospective foreign buyer of your eligible product so you can undertake promotional activities to market your eligible products to that buyer. This includes airfares to and from Australia, accommodation, food and incidental ground travel expenses.
Expense category 6: Soliciting for business in foreign country
Expenses for activities undertaken by you or your representative to solicit for business in a foreign country for your eligible products.
Expense category 7: Free samples
Providing free samples of your eligible product to either:
- A person in a foreign country
- A person in Australia from a foreign country, if your eligible product is tourism services.
- Expenses that are attributable to the actual cost of providing product samples free-of-charge
- Costs such as postage or freight to deliver samples overseas.
This does not include samples given away as discounts or sales-related adjustments to the recipient, or where they relate to product or prototype development. Your samples must be the same as your product that would be provided under any future sales agreements.
Expense category 8: Promotional and advertising material
Producing and providing material to promote or advertise your eligible product in a foreign country. This includes website design and build costs, social media marketing, Google advertising, and design and printing of brochures.
Expense category 9: Intellectual property rights
Seeking the granting, registration or extension of intellectual property rights of your eligible product in a foreign country. This includes payments to patent and trademark attorneys and to relevant government trademark and patent offices.
Expense category 10: Training activities – Representative bodies
If you are a representative body delivering, or arranging to be delivered, training to members of the represented group to enable them to better market their eligible products in foreign countries.
Expense category 11: Training activities – Tier 1 applicants
If you are a Tier 1 applicant, obtaining training to enable you or your staff ton better market your eligible products in foreign countries.
Your training expenses are not eligible if that training is being funded under a grant agreement with a representative body.
You must keep payment records of all eligible expenditure and be able to explain how the costs relate to the conditions of your grant agreement. Eligible applicants will be required to provide a milestone report before Austrade makes a milestone payment. The report must be submitted in-line with the timeframes detailed in the grant agreement.
BDO can assist you in determining your eligibility for the EMDG program, as well as assessing which expenses are eligible under the program. If you have any questions or would like to apply, please get in contact with our BDO Government Grants and Incentives team.