Who is Eligible for the EMDG Grant?

By Rimon
•
3 Apr, 2024

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The Export Market Development Grant (EMDG) scheme is a key component of Australia's export support landscape, designed to encourage businesses to enter and expand their presence in international markets. Administered by Austrade, the EMDG scheme offers financial assistance to a wide array of businesses by reimbursing a portion of their marketing and promotional expenses. Understanding who is eligible to claim the EMDG rebate is crucial for businesses aiming to maximise their international market development efforts. This article delves into the eligibility criteria, types of businesses that can benefit, and key considerations for applicants.

Eligible Criteria for EMDG

The EMDG scheme is inclusive but has specific eligibility criteria designed to ensure that the funding supports genuine export growth activities. At its core, EMDG grant eligibility is centred around a few key criteria:

Australian Business: Applicants must be an Australian individual, partnership, company, association, cooperative, statutory corporation, or trust that has carried out export promotion activities. This definition underscores the scheme's aim to bolster Australian exports.
Annual Income: Typically, applicants must have an income of less than AUD 20 million in the financial year in which they apply. Additionally, the EMDG grant is considered as assessable income.
Expenditure on Eligible Export Promotion Activities: Applicants must have spent funds on eligible export promotion activities within the previous financial year. This expenditure is then categorised into EMDG expense categories after determining the EMDG grant eligibility.
Principal Status: Applicants need to be the principal (not an agent) in the export transactions, implying they have ownership of the goods or services being marketed and bear the major risks associated with the transaction.
Eligible Products: The products or services for which marketing expenses are incurred must be of Australian origin, or if not, applicants must demonstrate significant net benefit to Australia from their marketing activities. This includes goods, services, intellectual property, and know-how.

Importantly, your EMDG grant consultant will assist in determining your EMDG grant eligibility.

Types of Businesses That Can Benefit

Virtually any Australian business aiming to expand its international market footprint can benefit from the EMDG scheme, provided they meet the eligibility criteria. This includes:

Manufacturers and Producers: Companies that produce goods in Australia and seek to market them overseas.
Service Providers: Businesses providing services from Australia to foreign customers, including education, tourism, engineering, and digital services.
Software and Technology Firms: Developers and vendors of Australian software and technology solutions targeting international markets.
Consultants and Professional Service Firms: Entities offering specialised services, such as legal, architectural, or consulting services, to clients abroad.
Creative and Cultural Industries: Businesses in the arts, film, entertainment, and cultural sectors promoting their work internationally.

The Tiered EMDG structure

The EMDG scheme employs a tiered structure designed to support exporters at various stages of their export journey. This structure enables businesses to access financial assistance tailored to their specific needs and level of export maturity. The tiers are as follows:

Tier 1: Entering Export

Objective: Support for first-time exporters to develop marketing strategies and explore export opportunities.
Eligible Activities: Activities under this tier are designed to help businesses understand their potential markets and lay the groundwork for export success. This includes market research, initial marketing visits, and basic promotional activities.
Duration: Businesses can access Tier 1 support for up to two years.

Tier 2: Expanding

Objective: Assistance for exporters looking to expand their presence in existing markets or enter new markets.
Eligible Activities: More advanced marketing and promotional activities are supported in this tier, including more extensive market campaigns, participation in trade shows, and the establishment of marketing networks.
Duration: Companies may receive Tier 2 support for up to three years, reflecting the need for a sustained effort to grow in competitive international markets.

Tier 3: Expanding and Strategic Shift

Objective: Tailored for mature exporters with a strategic focus on significant global expansion or those needing to make a strategic shift in their approach to exporting.
Eligible Activities: This tier supports high-level, strategic marketing and promotional activities aimed at significantly enhancing the exporter's market engagement. This includes activities that solidify market presence, such as establishing offices or significant advertising campaigns.
Duration: Eligibility for this tier extends up to three years, facilitating substantial and strategic export growth initiatives.

The tiered approach of the EMDG scheme is designed to provide more targeted support as businesses progress through different stages of export growth. This ensures that the assistance is relevant and proportional to the needs of exporters at each stage, from exploring and entering new markets to expanding significantly on the global stage. Businesses are encouraged to review the specific criteria and guidelines for each tier to understand how the EMDG can best support their export objectives.

Key Considerations for Applicants

Market Focus: The EMDG scheme supports export promotion activities aimed at specific foreign markets. Applicants should have a clear strategy on how their marketing efforts are targeted at generating export sales in these markets.
Documentation and Record-keeping: Successful applicants meticulously document their export promotion activities and expenses. This includes keeping detailed records of overseas marketing visits, promotional material costs, payments to overseas representatives, and participation in trade fairs.
Understanding of EMDG Eligible Expenses: Grasping which expenses are eligible under the scheme is critical. Eligible expenses can range from the cost of producing promotional materials to fees for marketing consultants or costs associated with registering patents or trademarks overseas. Your EMDG grant consultant will assist in isolating the EMDG-eligible expenses incurred within the previous financial year.
Timing and Planning: Considering the scheme operates on a reimbursement basis, businesses need to plan their activities and budget accordingly. Understanding the application cycle and planning activities to align with this cycle can enhance the chances of maximising the rebate.
Legal and Compliance Aspects: Applicants should ensure their export promotion activities comply with Australian export regulations and the legal requirements of the target market. This includes compliance with trade sanctions and export controls.

Conclusion

The EMDG scheme represents a significant opportunity for Australian businesses to expand their reach into international markets. By understanding the eligibility criteria and strategically planning export promotion activities, businesses across various sectors can leverage this program to offset some of the costs associated with international marketing efforts. Given the competitive nature of global markets, the financial support provided by the EMDG scheme can be a critical factor in enabling Australian businesses to achieve international success. Applicants are encouraged to engage with Austrade and possibly seek advice from EMDG grant consultants to navigate the application process effectively.