Your Complete Guide to the Export Market Development Grant

The Export Market Development Grants (EMDG) scheme, administered by Austrade, is a financial assistance program for Australian exporters. Its primary goal is to encourage small and medium-sized Australian businesses to develop and expand their export markets by reimbursing a portion of their promotional expenses. The EMDG act reflects the Australian government's commitment to boosting the international competitiveness of Australian businesses.

Eligibility Criteria

Who can apply?

1. Australian Businesses: Applicants must be Australian individuals, partnerships, companies, associations, cooperatives, statutory corporations, or trusts that have undertaken export promotion activities. This means the business needs to have an Australian Business Number (ABN) and be carrying out business operations in Australia.
2. Exporters of Eligible Products: The scheme is open to exporters of goods and services that are Australian-made or provided. This includes the export of intellectual property and know-how if it results in a significant net benefit to Australia. The exports can cover a wide range of sectors, from manufacturing and technology to education and tourism services.
3. Principal, Not an Agent: Applicants must be the principal in the export transaction. This means they should own the goods or services being exported at the time of sale and be responsible for the business risks associated with the export. Agents acting on behalf of other businesses are not eligible unless specific conditions are met.
4. Financial Expenditure Requirements: Businesses must have incurred at least $15,000 in eligible export promotion expenses. For first-time applicants, this expenditure can be across two financial years, while for subsequent applications, the expenses should be within the financial year of applying.
5. Income Threshold: The applying entity must have an annual turnover of less than $50 million in the financial year of the application.
6. Potential and Current Exporters: Both aspiring and current exporters can apply, provided they meet the other eligibility criteria. The scheme supports businesses at various stages of their export journey through a tiered approach, catering to businesses entering export markets, expanding their export activities, or making a strategic shift in their export focus.
7. Compliance with Australian Laws: Applicants must comply with all relevant Australian laws, including those related to exports, and should not be subject to insolvency proceedings.
   
   

Eligible Expenses

Key areas covered:

1. Overseas Representatives: Costs related to having representatives overseas to market and promote your products or services. An applicant can claim the costs associated with the overseas representative’s retainer fees, costs of their promotional works, and travel expenditures to meet with potential customers.
2. Marketing Visits: Travel expenses for visits to foreign markets, including airfares (economy class only) and a daily allowance to cover accommodation, meals, and on-ground transport.
3. Free Samples: The cost of providing free samples of the product you are promoting to potential buyers overseas.
4. Trade Fairs, Seminars, and In-store Promotions: The costs of participating in trade fairs, seminars, in-store promotions, and similar activities that promote your product or service to an international audience.
5. Promotional Literature and Advertising: Expenses related to the production and distribution of promotional material, including brochures, videos, advertising, and website development, with the specific purpose of attracting foreign customers.
6. Overseas Buyers: The cost of bringing potential buyers to Australia for eligible export promotion activities, subject to certain conditions and limitations.
7. Registration and Insurance of Intellectual Property: Fees associated with the registration and insurance of patents, trademarks, copyrights, and designs in foreign markets, provided these are directly linked to your export goods, services, intellectual property, or know-how.
8. Market Research and Consultancy Services: The costs of hiring external consultants to undertake market research or marketing strategies to identify and exploit export opportunities. This also covers the expenses of specific consultants used to locate and negotiate with overseas buyers or representatives.
   
   

EMDG Tiers

Tier Structure:

The Export Market Development Grants (EMDG) scheme employs a tiered structure to support businesses in Australia at different stages of their export journey. This tiered approach is designed to provide targeted assistance, recognising that businesses have varying needs depending on their experience and success in international markets. Here's a breakdown of the EMDG tiers:

Tier 1: Entering Export

• Objective: To support businesses that are new to exporting or are ready to begin their export journey. Tier 1 focuses on helping these businesses understand their potential in international markets and commence their marketing and promotional efforts.
• Eligible Activities: Market research, initial marketing visits, the creation of marketing materials, and other activities aimed at generating export business for the first time.
• Duration: Businesses can access Tier 1 support for up to two years, providing a foundational period to build their export capabilities.
  
  

Tier 2: Expanding

• Objective: Aimed at businesses that already engage in exporting and are looking to expand their presence in existing markets or to enter new markets. Tier 2 supports businesses in scaling up their international marketing efforts.
• Eligible Activities: More extensive marketing campaigns, additional market research, participation in international trade shows, and establishing marketing networks to bolster their market presence.
• Duration: Companies may receive Tier 2 support for up to three years, facilitating a deeper engagement with international markets and enabling businesses to capitalise on their existing export initiatives.
  
  

Tier 3: Expanding and Strategic Shift

• Objective: Designed for mature exporters who are making a significant strategic shift or targeting substantial global expansion. Tier 3 backs high-level strategic marketing and promotional activities aimed at significantly enhancing the exporter's market engagement.
• Eligible Activities: Large-scale marketing campaigns, establishing foreign offices or subsidiaries, and undertaking significant promotional activities aimed at securing a strong position in target markets.
• Duration: Eligible businesses can access Tier 3 support for up to three years, supporting their strategic goals for substantial growth or realignment in their export markets.
  
  

Progression through Tiers

Businesses are expected to progress through the tiers as they grow their export activities, with each tier designed to build upon the previous one. This progression reflects a pathway from exploring and entering new markets to expanding significantly on the global stage.

• Tier 1 offers foundational support to businesses taking their first steps in export.
• Tier 2 provides a deeper level of support for businesses looking to solidify and expand their international market presence.
• Tier 3 is for businesses at the forefront of their export journey, aiming for major expansion or a strategic pivot in their export strategy.

The tiered structure of the EMDG scheme ensures that the assistance provided is relevant and proportional to the needs of exporters at each stage of their development, facilitating sustainable growth and international success.

How the Benefit Works

1. Application and Assessment: Businesses apply after the financial year in which they incurred eligible expenses. Austrade assesses applications against the EMDG program's criteria.
2. Calculation of Grant: The grant amount is calculated as a percentage of eligible export promotion expenses. Typically, businesses can receive up to 50% of their eligible expenses, depending on which tier is applied for.
3. Payment Structure: Grants are paid typically within 2 weeks of approval following an assessment by Austrade. The assessment typically takes between 4-8 weeks following the submission of the EMDG application to Austrade and provides a detailed breakdown of the eligible EMDG expenditure incurred in the previous financial year.
   
   

Maximising the EMDG Cash Benefit

Maximising the Export Market Development Grants (EMDG) benefit involves strategic planning, meticulous record-keeping, and a deep understanding of the scheme's eligibility criteria and guidelines. Here are key strategies to ensure you get the most out of the EMDG scheme:

Understand the Eligibility Criteria and Guidelines

• Comprehensively review the EMDG eligibility requirements and guidelines provided by Austrade. Understanding which activities and expenses are eligible can help you plan your export promotion activities more effectively.
  
  

Plan Your Export Promotion Activities Strategically

• Target eligible activities: Focus your export promotion efforts on activities that qualify for EMDG reimbursement, such as overseas marketing visits, participation in trade fairs, digital marketing aimed at overseas markets, and securing intellectual property rights in target markets.
• Market selection: Prioritise markets that offer the most significant potential for your product or service. Tailoring your marketing strategy to these markets can improve the effectiveness of your export promotion activities and the ROI on your EMDG claim.
  
  

Maintain Detailed Records

• Keep meticulous records of all export promotion activities and expenses. This includes invoices, receipts, bank statements, contracts, correspondence, and proof of payment. Detailed records are essential for substantiating your claim and maximising your reimbursement.
• Document your marketing strategy: Keep a record of your marketing plans and strategies, including how each activity aligns with your overall export objectives. This documentation can support your claim by demonstrating the purpose and expected outcomes of your expenditures.
  
  

Leverage the Full Range of Eligible Expenses

• Diversify your activities: Utilise a broad range of eligible promotional activities to spread your risk and increase your engagement with target markets. This can include digital marketing, hiring overseas representatives, and protecting your intellectual property rights in new markets.
• Understand expense limits and caps: Some categories of expenses have annual limits or specific conditions. Familiarise yourself with these to plan your spending accordingly and ensure you're not leaving any eligible reimbursements unclaimed.
  
  

Seek Professional Advice

• Consult with EMDG consultants or advisors: These professionals can provide valuable insights into the EMDG application process and help identify additional eligible expenses that you might not have considered. Their expertise can be instrumental in maximising your claim.
  
  

Submit a Comprehensive and Timely Application

• Apply early: Submitting your application early in the application period can sometimes be advantageous, especially if there are changes to the EMDG program or if funds are limited.
• Be thorough and accurate: Ensure your application is complete and accurately reflects all your eligible export promotion activities and expenses. Incomplete or inaccurate applications can lead to delays or reduced grants.
  
  

Continuously Review and Adapt Your Strategy

• Learn from feedback: If your application is audited or you receive feedback from Austrade, use this as an opportunity to understand how you can improve your future claims.
• Adapt to changes in the EMDG scheme: Stay informed about any changes to the EMDG guidelines or eligibility criteria, as these can affect your future claims and strategy.

Maximising the EMDG benefit is not just about claiming as many expenses as possible; it's about strategically planning and executing your export promotion activities in a way that aligns with the EMDG guidelines, effectively supports your business goals, and optimises the financial support you receive from the EMDG program. By following these strategies, businesses can enhance their international market presence and achieve greater success in their export ventures.

Common Pitfalls to Avoid

Here are some common mistakes made during the EMDG application process and tips on how to avoid them:

1. Inadequate Record-keeping

Mistake: Failing to keep detailed records of expenses and activities related to export promotion can lead to difficulties in substantiating claims.

Avoidance: Maintain thorough documentation, including invoices, receipts, bank statements, and detailed records of activities, from the outset.

2. Misunderstanding Eligible Expenses

Mistake: Claiming expenses that are not eligible under the EMDG guidelines can result in reduced grant amounts or rejected applications. 

Avoidance: Review Austrade EMDG guidelines carefully to ensure a clear understanding of which expenses are eligible for reimbursement.

3. Incorrectly Apportioning Expenses

Mistake: Not properly apportioning expenses between domestic and export activities or between different markets can lead to inaccuracies in your claim. 

Avoidance: Use a consistent and logical method to apportion expenses, based on clear evidence of the split between export and non-export activities.

4. Incomplete or Inaccurate Applications

Mistake: Submitting applications that are incomplete or contain inaccuracies can delay processing or impact the success of your claim.

Avoidance: Double-check your application for completeness and accuracy before submission. Consider consulting with an EMDG advisor for a professional review.

5. Overlooking the Submission Deadline

Mistake: Missing the application submission deadline means missing out on the grant for that financial year entirely. 

Avoidance: Note the EMDG due date in your calendar well in advance and aim to submit your application early to avoid last-minute issues.

6. Not Demonstrating Export Intent

Mistake: Failing to demonstrate how the claimed activities support your export strategy can lead to questions regarding their eligibility.

Avoidance: Ensure your application clearly outlines how each activity is part of a coherent strategy to increase exports.

7. Failing to Claim All Eligible Expenses

Mistake: Overlooking or misunderstanding what can be claimed leads to businesses not maximising their potential rebate. 

Avoidance: Conduct a thorough review of all your export promotion activities and consult the EMDG guidelines or an advisor to identify all eligible expenses.

8. Not Utilising the Tiered Structure Effectively

Mistake: Not aligning activities with the correct EMDG tier or not progressing to higher tiers as eligible can limit the amount of support received. 

Avoidance: Understand the tier structure and how your business's current export activities fit within it to ensure you're applying for the appropriate tier and maximising your grant potential.

9. Relying on Previous Applications Without Updating

Mistake: Reusing information from past applications without adjustments for the current year can lead to inaccuracies or missed opportunities for additional claims. 

Avoidance: Each application should be treated as unique, with current and accurate information reflective of the latest financial year’s activities and expenses.

10. Not Seeking Professional Advice

Mistake: Attempting to navigate the EMDG application process without professional help can result in missed opportunities and errors. 

Avoidance: Consider engaging an EMDG consultant or advisor, especially if you are applying for the first time or if your situation has significantly changed.

Avoiding these common mistakes can enhance the accuracy and effectiveness of your EMDG application, potentially leading to a more substantial grant. Thorough preparation, careful documentation, and a clear understanding of the EMDG guidelines are key to a successful application.

Conclusion

The EMDG scheme is an invaluable tool for Australian exporters looking to expand their reach and competitiveness in international markets. By understanding the eligibility criteria, eligible expenses, the tiered structure, and how the benefit works, businesses can strategically plan and execute their export promotion activities. Meticulous record-keeping, a deep understanding of the scheme's requirements, and strategic planning are essential for maximising the benefits of the EMDG scheme. Businesses are encouraged to leverage this support to grow their exports, contributing to the broader success of the Australian economy on the global stage.

This guide provides a foundation for understanding the EMDG scheme. For more detailed information, including updates to the EMDG program and application tips, businesses should consult the official Austrade EMDG website or engage with EMDG consultants.

Contact us today and discover how we can support you navigate the EMDG scheme for export success.