The EMDG is a grant administered by Austrade that assists exporting businesses growing their markets. It can cover up to 50% of your overseas export-related marketing and promotional costs, subject to certain conditions and limits.
The expenses must be associated with developing your export earnings, which includes 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 will preapprove a grant (50/50) for your planned promotional expenses, in accordance with the following three-tier system:
Tier 1: For first-time exporters that are export-ready — claim up to $40k per FY for 2 years
Tier 2: For exporters expanding their export promotion activities — maximum of $80k per FY for 3 years
Tier 3: For exporters expanding export promotion activities and making a strategic shift (e.g., targeting a new market or new type of customer) — maximum of $150k per year for 3 years
In 2021-22 the EMDG is in transition to the new format, with the aim being to give businesses more certainty by offering 2 or 3-year agreements, as opposed to the previous system, which was a yearly reimbursement scheme.
The maximum amounts mentioned above are subject to the total pool of funding made available for the EMDG, which must be split between all eligible applicants. So as long as you satisfy the eligibility requirements you will receive a grant agreement offer, but the amount offered may be much less than the maximum amounts stated, so please keep that in mind, especially when spending on your export promotional activities in the period up until you receive your grant agreement.
You can receive a total of $770k under the EMDG program, over a period of up to 8 financial years (which don’t need to be consecutive).
Eligibility for EMDG
The scheme is for any Australian individual, partnership, company, association, co-operative, statutory corporation or trust (up to $20m turnover) 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 the export of one of the following products:
- Goods
- Services (a few exclusions)
- Events or conferences
- Intellectual property or know-how
- Software
The scheme does not prioritise particular industries and/or export markets. Export promotional expenses to New Zealand or North Korea are not eligible for the EMDG (for very different reasons).
The Austrade EMDG link for further information is:
https://www.austrade.gov.au/australian/export/export-grants/emdg-from-1-july-2021
What export marketing costs are eligible to claim?
The EMDG grant can be used to cover a fairly wide range of activities associated with establishing and expanding foreign markets for your eligible products; for example:
- Overseas representation – the cost for engaging or employing a long-term overseas representative to act of your behalf and generate export sales
- Marketing consultants and their expenses – the costs for engaging specialists for market research and/or for developing you export marketing plans
- Travel for marketing visits — up to 21 days per visit, within Australia or overseas and includes the costs for fares plus accommodation and meal allowance
- Foreign buyer visits to Australia — same rules as for “Travel for marketing visits”, but for prospective foreign buyers of your eligible product to come to Australia
- Free samples – the costs to provide free samples of your export product to a person in the foreign country
- 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 expos)
- Promotional literature and advertising – the costs for brochures, flyers, software, website, and overseas advertising, including Google, Facebook, and other sponsorships
- Patents and trademarks – the costs associated with securing patents and trademarks in overseas markets
The previous EMDG scheme had upper spending limits for a number of different expense categories; however, Austrade has stated that there will now only be an upper spending limit for travel costs (e.g., accommodation, flights, and daily allowances), and this limit will be set out in your grant agreement.
The Process
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 and then undertake your promotional activities as per this agreement.
- You submit proof of expenditure and 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.
Questions Worth Noting
- Q. Who is the EMDG targeted at?
A: The EMDG is targeted at 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 exporting for the first time
– Exporters who are currently exporting and are expanding their marketing activities
– Exporters who are currently exporting and are expanding their marketing activities and making a strategic shift (e.g., targeting new market or new type of customer) - Q. Is the viability of your company and your marketing plan important?
A. Yes – both are vital as the government only wishes 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. Tier 1 applicants are those that have never earned any export income (but they must be “export-ready”). Tier 2 and 3 applicants must already be exporting and will need to show proof of this in their grant agreement application. - 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 upon. - Are questions asked about the character of the company directors and principals?
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.
Key Takeaways
Overall, this grant scheme can help you 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 particulars 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 Market Development Grant, and to check if your company is eligible to claim, please do not hesitate to contact us. Our expert Grant Consultants can help you maximise your claim and be successful with future grant applications.
