LCQ18: BUD Fund
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Question:
The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) is one of the initiatives of the Government in supporting SMEs, aiming at assisting local enterprises in upgrading, transformation and development of diversified markets. It is learnt that the approval rate, funding ratio and funding ceiling of the Fund are of great concern to enterprises. In this connection, will the Government inform this Council:
(1) of the respective numbers of applications under general applications, "Easy BUD" and the "E-commerce Easy" of the BUD Fund received each year since the launch of the initiative; among them, the respective numbers of applications which were (i) approved, (ii) not approved and (iii) withdrawn by enterprises, as well as the respective amounts of average funding per approved application;
(2) whether it has assessed the impact on enterprises' desire to apply for the Fund after the funding ratio of the BUD Fund was adjusted to 1 (Government): 3 (enterprises) in March 2025; if so, of the details;
(3) whether it will consider further expanding the geographical coverage of the BUD Fund, such as unifying the geographical coverage for general applications and "E-commerce Easy" of the BUD Fund, and including locally-conducted projects for brand promotion and building within the funding scope; if so, of the details; if not, the reasons for that;
(4) it is learnt that the approval rates for applications under "Easy BUD" and "E-commerce Easy" were below 40 per cent in the past, whether the authorities have put in place measures to support enterprises, so as to enhance the success rates of applications; if so, of the details; and
(5) of the number of enterprises that have fully utilised the funding ceiling under the BUD Fund at present; whether the Government will adopt the suggestion from some enterprises to increase the funding ceilings for the respective application schemes under the Fund; if so, of the details; if not, the reasons for that?
Reply:
President,
The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) has been providing funding support to the trade since its establishment in 2012 to encourage non-listed Hong Kong enterprises to develop business in 40 economies with which Hong Kong has signed free trade agreements (FTAs) and/or investment promotion and protection agreements (IPPAs) through branding, upgrading and restructuring, and promoting sales. To strengthen the support for enterprises, the Government launched "Easy BUD" in June 2023 to expedite the vetting of applications involving designated measures, and launched "E-commerce Easy" in July 2024 to encourage enterprises to make use of the funding flexibly to implement electronic commerce projects.
The reply to the questions raised by the Hon Jimmy Ng is as follows:
(1) Since the establishment of the BUD Fund, the number of applications received, approved, rejected and withdrawn by enterprises, as well as the average approved funding amount per application each year are as follows:
| Year | Number of applications received (Note 1) |
| 2012 | 519 |
| 2013 | 430 |
| 2014 | 254 |
| 2015 | 404 |
| 2016 | 625 |
| 2017 | 578 |
| 2018 | 1 082 |
| 2019 | 1 721 |
| 2020 | 3 521 |
| 2021 | 2 580 |
| 2022 | 2 637 |
| 2023 (Note 2) | 4 739 (General application: 4 145, "Easy BUD": 594) |
| 2024 (Note 3) | 7 262 (General application: 5 953, "Easy BUD": 1 082, "E-commerce Easy": 227) |
| 2025 | 5 347 (General application: 3 496, "Easy BUD": 1 330, "E-commerce Easy": 521) |
(i)
| Year | Number of applications approved | Average funding amount per approved application ($) | |
| 2012 | 92 | 396,000 | |
| 2013 | 103 | 466,000 | |
| 2014 | 85 | 483,000 | |
| 2015 | 129 | 421,000 | |
| 2016 | 390 | 266,000 | |
| 2017 | 343 | 359,000 | |
| 2018 | 479 | 455,000 | |
| 2019 | 719 | 583,000 | |
| 2020 | 881 | 664,000 | |
| 2021 | 894 | 706,000 | |
| 2022 | 1 334 | 716,000 | |
| 2023 | 1 690 | (General application: 1 600, "Easy BUD": 90) |
General application: 713,000 "Easy BUD": 68,000 |
| 2024 | 2 656 | (General application: 2 228, "Easy BUD": 421, "E-commerce Easy": 7) |
General application: 736,000 "Easy BUD": 75,000 "E-commerce Easy": 466,000 |
| 2025 | 2 776 | (General application: 2 365, "Easy BUD": 301, "E-commerce Easy": 110) |
General application: 719,000 "Easy BUD": 68,000 "E-commerce Easy": 566,000 |
(ii)
| Year | Number of applications rejected |
| 2012 | 129 |
| 2013 | 326 |
| 2014 | 149 |
| 2015 | 67 |
| 2016 | 117 |
| 2017 | 84 |
| 2018 | 101 |
| 2019 | 414 |
| 2020 | 234 |
| 2021 | 487 |
| 2022 | 405 |
| 2023 | 387 (General applications: 353, "Easy BUD": 34) |
| 2024 | 787 (General applications: 583, "Easy BUD": 194, "E-commerce Easy": 10) |
| 2025 | 1 951 (General applications: 1 467, "Easy BUD": 324, "E-commerce Easy": 160) |
(iii)
| Year | Number of applications withdrawn (Note 4) |
| 2012 | 84 |
| 2013 | 123 |
| 2014 | 61 |
| 2015 | 60 |
| 2016 | 144 |
| 2017 | 193 |
| 2018 | 195 |
| 2019 | 488 |
| 2020 | 1 433 |
| 2021 | 1 276 |
| 2022 | 1 063 |
| 2023 | 1 553 (General application: 1 356, "Easy BUD": 197) |
| 2024 | 2 199 (General application: 1 619, "Easy BUD": 530, "E-commerce Easy": 50) |
| 2025 | 2 137 (General application: 1 471, "Easy BUD": 472, "E-commerce Easy": 194) |
(2) The Government implemented rationalisation measures in March 2025 such that the BUD Fund would be utilised in the most productive manner and its financial sustainability be ensured. As at end-February 2026, the BUD Fund received a total of over 32 000 applications. In 2025, the BUD Fund received around 5 350 applications, an increase of over 210 per cent as compared with that in 2019, reflecting that the trade's demand for the BUD Fund has remained strong.
The funding ratio of the BUD Fund was adjusted in March 2025, and its effectiveness needs to be reviewed over time. In addition, we have relaxed the frequency for submitting "Easy BUD" applications and provided more targeted funding support for projects on green transformation and restructuring of production lines, etc. since March 2025. Meanwhile, we plan to implement a series of enhancement measures in the second quarter of 2026, including expansion of the fund's geographical scope and enhancing promotion and facilitating enterprises' participation in exhibitions and export promotion activities through "Easy BUD", which were announced in the 2025 Policy Address; as well as increasing the funding ceiling per "Easy BUD" application by 50 per cent from $100,000 to $150,000 and providing more targeted funding support for enterprises to implement BUD Fund projects involving artificial intelligence elements, which were announced in the 2026-27 Budget. In this connection, we need time to review the relevant financial implications. We will continue to manage the fund prudently to ensure its financial sustainability, and utilise the public funds in a timely and focused manner to enable more enterprises to receive funding support and to maintain a wide spread of beneficiaries.
(3) The current geographical scope of the BUD Fund covers 40 economies (Note 5) with which Hong Kong has signed FTAs and/or IPPAs, accounting for more than 80 per cent of Hong Kong's total trade in goods in 2025. The 2025 Policy Address announced the expansion of the geographical scope of the fund by 20 per cent to cover eight more economies (Note 6). We plan to seek approval from the Finance Committee of the Legislative Council in the second quarter of 2026, with a view to implementing the expansion of the geographical scope of the fund to a total of 48 economies in the same quarter. The geographical scope of the BUD Fund will also be correspondingly expanded as Hong Kong signs more FTAs and/or IPPAs with other economies in the future.
"E-commerce Easy" was launched for less than two years and its geographical scope was expanded to the 10 countries of the Association of Southeast Asian Nations in March 2025. The Government will therefore continue to review its operational arrangements and consider making adjustments and enhancements, having regard to the market situation, practical experience and provided that the financial sustainability of the fund is ensured.
The BUD Fund was established with the aim of assisting Hong Kong enterprises in developing more diversified markets outside Hong Kong, thereby enhancing their competitiveness. Enterprises will receive funding support to implement project measures covered by the BUD Fund (including measures implemented locally) to develop their businesses in markets covered by the geographical scope of the fund, provided that the existing guidelines and other funding criteria can be satisfied. If participation in a Hong Kong exhibition is involved, the applicant enterprise needs to demonstrate the direct relevance between the exhibition and its business development in the target market, such as the past editions' effectiveness. The Hong Kong Productivity Council (HKPC), the Programme Secretariat of the BUD Fund, will overall consider the specific circumstances of each individual case when vetting the applications.
(4) As at end-2025, the approval rates of "Easy BUD" and "E-commerce Easy" are 60 per cent and 41 per cent respectively. The HKPC, the Programme Secretariat of the BUD Fund, has been vetting all the applications stringently by following the criteria stipulated in the Guide to Application to ensure that only eligible applications can be approved. Therefore, the approval rates depend on the merits of individual applications and whether the funding conditions could be fulfilled. The major rejection reasons for "Easy BUD" and "E-commerce Easy" applications include the failure in fulfilling the eligibility of having substantive business operations in Hong Kong or the failure in obtaining the necessary licenses to start their businesses in the target markets by the applicant enterprises. As "E-commerce Easy" was launched for less than two years and submission of supporting documents in respect of some applications made by the applicant enterprises are pending, the approval rate has yet to take into account those applications.
The Government has, since 2020, provided an online application system for the BUD Fund, and simplified the application form. The dedicated webpage of the BUD Fund already provides information on the application process, frequently asked questions, application tip, success stories, etc., for enterprises to refer to when planning their projects. The HKPC and the "SME ReachOut" also provide free one-on-one consultation services to answer enquiries relating to application. The Programme Secretariat has also been promoting the BUD Fund to enterprises, including their understanding of "Easy BUD" and "E-commerce Easy", through a series of measures, including participating in exhibitions or information expos, placing advertisements, and distributing promotional leaflets.
(5) As at end-February 2026, no enterprise had exhausted the $7 million cumulative funding ceiling per enterprise under the BUD Fund thus far, and the enterprises which had utilised the cumulative funding amount of $4 million or more is around 1 per cent. Hence, the current funding ceiling of $7 million should be sufficient to meet the needs of enterprises. Enterprises can freely allocate the funding ceiling of $7 million among different application types, i.e., general application, "Easy BUD" or "E-commerce Easy", based on their own needs. As mentioned above, the Government announced in the 2025 Policy Address and the 2026-27 Budget that further enhancement measures (including the increase of the funding ceiling per "Easy BUD" application by 50 per cent from $100,000 to $150,000) will be rolled out. The Government will continue to keep in close touch with the trade, and to review the BUD Fund's implementation from time to time to provide adequate support to small and medium enterprises, while taking into account the financial capacity and sustainability of the BUD Fund.
Note 1: Applications received may not be processed in the same year. The figures include applications that could not be processed owing to incomplete information and those withdrawn voluntarily by enterprises afterwards.
Note 2: "Easy BUD" was launched in June 2023.
Note 3: "E-commerce Easy" was launched in July 2024.
Note 4: The figures include applications that could not be processed owing to incomplete information and those withdrawn voluntarily by enterprises afterwards.
Note 5: The 40 economies currently covered include the Chinese Mainland, 10 member states of the Association of Southeast Asian Nations (comprising Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam), Australia, Chile, the four member states of the European Free Trade Association (i.e. Iceland, Liechtenstein, Norway and Switzerland), Georgia, Macao, New Zealand, Japan, Korea, Austria, Belgo-Luxembourg Economic Union, Canada, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Sweden, the United Kingdom, Kuwait, the United Arab Emirates, Türkiye, Bahrain and Peru.
Note 6: The eight economies are Saudi Arabia, Bangladesh, Egypt, Hungary, Pakistan, Kazakhstan, Mongolia and Brazil.
Ends/Wednesday, April 1, 2026
Issued at HKT 16:50
Issued at HKT 16:50
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