Following is a question by the Hon Sunny Tan and a reply by the Secretary for Commerce and Economic Development, Mr Algernon Yau, in the Legislative Council today (October 15):

Question:

     The 2025 Policy Address announced an injection of $1.43 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) and an expansion of its geographical scope. In this connection, will the Government inform this Council:

(1) as some members of the trade have relayed that the simplified application track under the BUD Fund ("Easy BUD") is very popular among the trade, whether the Government will consider raising the funding ceiling for each "Easy BUD" project from $100,000 to $300,000; if so, of the details; if not, the reasons for that;

(2) whether the Government will consider further expanding the application scope of the BUD Fund to cover all markets outside Hong Kong, so as to align with the application scope of the SME Export Marketing Fund which will be consolidated into the BUD Fund next year, thereby better supporting the trade in developing domestic sales, as well as traditional and emerging markets; if so, of the details; if not, the reasons for that; and

(3) given that the Government's Operating Account is expected to record a surplus in the next financial year, whether the Government will consider adjusting the matching ratio of the BUD Fund to 1:1 of the total approved expenditure between the Government and the enterprises, so as to assist the trade in upgrading their operations; if so, of the details; if not, the reasons for that?

Reply:

President,

     The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) is one of the initiatives of the Government in supporting small and medium-sized enterprises (SMEs), aiming at assisting local enterprises in upgrading, transformation and development of diversified markets. From its inception in 2012 to September 2025, nearly 12 000 applications have been approved under the BUD Fund, involving a total funding amount of around $7.5 billion and benefitting around 7 800 enterprises. The Government has since 2018 launched several rounds of enhancements to the BUD Fund, including the injection of a total of $7.7 billion, the expansion of the geographical scope, the phased increase of the cumulative funding ceiling per enterprise from $0.5 million to $7 million, and the launch of "Easy BUD" and "E-commerce Easy", etc.

     The reply to the three parts of the question by the Hon Sunny Tan is as follows:

(1) "Easy BUD" was launched in June 2023 to expedite the processing of applications involving designated measures with a funding amount of $100,000 or below. The application form, requirements for supporting documents and vetting arrangements of "Easy BUD" have been streamlined. As compared with the performance pledge for general applications of the BUD Fund, the processing time of an "Easy BUD" application has also been significantly reduced by half to within 30 working days.

     As at end-September 2025, a total of 760 applications have been approved under "Easy BUD", with an average funding amount of around $72,000. We believe that maintaining the funding ceiling of $100,000 for each application can meet the needs of most enterprises. Besides, to ensure the prudent use of public money, we need to strike a cautious balance between the funding amount and the potential financial risks when determining the funding ceiling of each "Easy BUD" application. We consider the current arrangement appropriate.

     In addition, to enable enterprises to receive funding support more expeditiously with a view to coping with the ever-changing economic environment, we have enhanced the arrangement of "Easy BUD" since March 2025 to allow each enterprise to submit application once every three months, instead of once every six months in the past. We have also expanded the funding scope to include the establishment of online sales platform.

(2) The current geographical scope of the BUD Fund covers 40 economies with which Hong Kong has signed free trade agreements (FTAs) and/or investment promotion and protection agreements (IPPAs), accounting for around 80 per cent of the total value of Hong Kong's external merchandise trade in 2024. The Chief Executive announced in the 2025 Policy Address the further expansion of the geographical scope of the BUD Fund to cover eight more economies, including Belt and Road countries, i.e. expanding the geographical scope by 20 per cent, to assist SMEs in developing more diversified markets. Meanwhile, as the SME Export Marketing Fund will be consolidated into the BUD Fund in July 2026, we will enhance promotion and facilitate enterprises' participation in exhibitions and export marketing activities through "Easy BUD".

     Hong Kong is exploring the signing of IPPAs with a number of economies, among which the IPPA negotiation with Qatar has been substantially concluded. Both sides will sign the agreement upon completion of respective internal procedures. The geographical scope of the BUD Fund will be further expanded when Hong Kong signs more FTAs or IPPAs in the future. Since March 2025, we have also expanded the geographical scope of "E-commerce Easy" to the 10 member states of the Association of Southeast Asian Nations.

(3) Over the years, the BUD Fund has been actively supporting SMEs, with several rounds of enhancement measures rolled out. At the same time, demand from enterprises for the Government's funding support has surged significantly in recent years. The number of applications for the BUD Fund in 2024 increased by over 320 per cent as compared with that in 2019, and close to 90 per cent of the subsidies under the BUD Fund were approved in the past six years (2019 to 2024).

     To ensure the financial sustainability of the BUD Fund, the Government introduced measures in March 2025, including the adjustment of the funding ratio of the BUD Fund to 1 (Government): 3 (enterprise), such that enterprises could choose appropriate and cost-effective projects more prudently and be more willing to put in resources. Given that the measure was recently launched in March 2025, we need more time to review its effectiveness, and hence do not have plans to adjust the funding ratio.

     Supporting SMEs is one of the Government's important policies. Therefore, the Government will be injecting more than $3 billion into the BUD Fund in the current and the next financial year. This notwithstanding, we need to be mindful of the financial sustainability of the funding scheme with a view to enabling more enterprises to make use of the funding and maintaining an appropriate spread of beneficiaries. As such, the Government will prudently utilise public funds in a timely and focused manner to cope with the complex and ever-changing economic environment.

     Apart from enhancing "Easy BUD" and "E-commerce Easy", we have been providing more targeted funding support to enterprises in implementing green transformation projects, and have specified that professional fees associated with the establishment of new business entities are fundable, so as to assist enterprises in restructuring their supply chains in the face of challenges brought about by the trade war.

     We will continue to keep in close touch with the trade and will review the implementation of the BUD Fund from time to time to provide appropriate support to SMEs, while taking into account the financial capacity and sustainability of the BUD Fund.

Ends/Wednesday, October 15, 2025
Issued at HKT 12:45

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