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What is the Export Marketing Development Grant (EMDG)?
The Export Marketing Development Grant is a great Australian government grant administered by Austrade that facilitates exporting businesses to grow their markets. EMDG is a financial grant designed to meet 50% of your overseas marketing costs, subject to certain conditions and limits.
For the Export Marketing Development Grant, the expenses must be associated with developing your export earnings and include promotional expenses such as free samples and advertising, overseas marketing and representation expenses and events such as trade fairs and seminars etc.
The program is quite robust in terms of scale and expenses which you can claim, and it can preapprove a grant (50/50) for your planned promotional expenses in a three-tier system:
Tier 1. Up to $ 40,000 x 2 years (new applicants)
Tier 2. Up to $ 80,000 x 3 years (existing exporters)
Tier 3. Up to $150,000 x 3 years (existing large exporters)
= Maximum of $770,000 over any 8 year period.
Eligibility for EMDG
The scheme is for any Australian individual, partnership, company, association, co-operative, statutory corporation or trust (up to $20m turn over) that is carrying on export promotion or is export ready. All directors and owners must be reputable and in good standing with the Australian Government. That is, no outstanding issues such as unpaid debts, insolvency or criminality.
The entity applying must be the principal (own the product or service or IP) and not merely an agent and if part of an International entity, the claim can only be for amounts paid by the Australian entity to non-related parties. The business must promote one of the following:
- the export of goods or most services
- inbound tourism
- the export of intellectual property and know-how
- conferences and events held in Australia
The scheme does not prioritise particular industries and/or export markets however, exports to New Zealand and to Nth Korea are not included and for very different reasons.
The Austrade EMDG link for further information is:
What export marketing costs are eligible to claim?
There are seven categories for claimable export marketing expenses and each expense must be applied for and approved before it is eligible for the grant:
- Overseas representation – the cost for engaging or employing a long-term overseas representative to act of your behalf and generate export sales (max. claim $200,000)
- Marketing consultants and their expenses – the costs for engaging specialists for market research and or for developing you export marketing plans (max claim $50,000)
- Travel for marketing visits – the cost for fares plus an accommodation/meal allowance of $350 per day (up to 21 days per visit)
- Free samples – the costs to provide free samples of your export product (max. claim $15,000)
- Trade shows and fairs – the costs of participating in International trade fairs including in Australia (if proof of overseas participation is clear e.g. Tourism expo’s)
Promotional literature and advertising – the costs for brochures, flyers, software, website and overseas advertising including google, facebook and sponsorships
- Patents and trademarks – the costs associated with securing patents and trademarks in overseas markets (max. claim $50,000)
You apply for a grant before you spend money on promotional activities.
- Once all applications have been assessed, Austrade offers a grant agreement to each eligible applicant.
- You enter into a grant agreement with Austrade. You then undertake your promotional activities as agreed in the grant agreement.
- You request milestone payments in accordance with your grant agreement.
- Your grant agreement will set out when your milestone payments should be made and what you need to do in order to receive these payments.
Assessment and payment of claims
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Austrade assessors review the application and decide if the information provided is sufficient for the grant application. Once the application is approved, an agreement is sent to the applicant with an agreed payment structure. Normally, this payment is capped at the claim amount from within the selected tier e.g. 1,2 or 3. However, the government sets a finite amount for the whole grant program and so Austrade works out the total claims and then pays prorate to each applicant.
You will need to supply your full banking details for online payment of any grant amount paid is treated as taxable income in the year it is received by your enterprise.
Assessment Review Process (Audit)
Most claimants can expect to be audited. The audit is a more forensic look at your claim and the evidence you have to substantiate the amounts being claimed.
Therefore, high quality record keeping is a must including items such as:
- export sales invoices
- expense invoices or receipts
- bank statements – showing earned income and expenses claimed
- journals, trip reports and or promotional material if appropriate
- and or formal agreements especially for overseas representatives or dedicated
- marketing staff and consultants
Note: that expenses that have been or that will be reimbursed by a third party are ineligible for your claim.
Questions Worth Noting
- Q. Who is the EMDG targeted at?
A: EMDG is targeted toward exporters with a turnover of less than $20 million at three stages of their export journey:
– SME’s that are export-ready and will be doing business overseas for the first time
– Exporters who have claimed EMDG before and are expanding their current markets or entering new markets
– Larger exporters who have claimed a number of EMDG’s and continue to expand into their new and existing markets
- Q. Is the viability of your company and your marketing plan important?
A. Yes – both are vital as the government only wish to support viable companies who can generate future export income and have a solid plan to do so
- Q. Do you need to earn export income to be eligible
A. Yes – there needs to be earned export income or if a new exporter there must be a very strong likelihood of earning export income.
- Is your export income expected to rise following a grant?
A. Yes – and therefore Austrade may follow up the grant for verification of results.
- Do you enter into a legal agreement to action the grant monies?
A. Yes – you will enter into a legally binding arrangement with the federal government as to the amounts and actions (export marketing activities) being agreed to.
- Are questions asked about the character of the company directors and principles?
A. Yes – the enterprise must have reputable ownership/leadership and no outstanding insolvency, issues of criminality or issues with government departments such as ATO etc
- Q. Is your enterprise expected to contribute towards the export marketing expenditure
Yes – Currently you must provide 50% of the expenses
Overall, this grant scheme can assist you to increase your export marketing budget and therefore your effectiveness in generating export dollars for your enterprise and for Australia. It is a great program with exciting potential and although the particles for grant applications and acquittals can be complex, we believe that it is well worth you applying for the EMDG grant to help develop your export markets.
If you would like to know more about the Export Marketing Development Grant, or check if your company is eligible to claim, please do not hesitate to contact Fullstack Advisory. Our expert Grant Consultants can assist you to maximise your claim and to be successful with future grant applications.
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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, crypto and entrepreneurs.