The EMDG is a key financial assistance scheme of Australian Trade and Investment Commission (Austrade) designed to encourage Australian SMEs to seek foreign opportunities for their export goods, services, and intellectual property. Each year the EMDG helps some 4,000 SMEs to expand their export business through financial assistance for promotional and marketing activities.
Prior to the 1st of July 2021 the grant has operated as a reimbursement model, the reform model outlined in the federal budget expels the existing model and replaces it with an eligibility-based grants program with the intention of eliminating the wait for reimbursement providing businesses with upfront funds. Businesses looking to continue to receive EMDG will have to make two claims this financial year one for marketing and promotion expenditure which was SPENT in FY21 and one for marketing and promotion activities which WILL BE SPENT in spent over the next 2-3 years. This process will be outlined for your convivence below:
The Traditional EMDG Grant – open now and closes 30 November 2021
The traditional EMDG grant applications close on 30 November 2021 with tranche one payment ceiling of $30,000 payable upon application approval and audit.
Austrade receives significantly less applications between July and October due to many businesses leaving the application to the final days before the deadline. It is advisable to get your applications in as early as possible so that Austrade has the capacity to Audit and Approve applications in a timely way and release tranche one payment.
Under the traditional reimbursement model, the EMDG program provides cash reimbursements to SMEs with turnover of less than $50 million, by reimbursing up to 50% of eligible expenses (less the first $5,000 of expenses) associated with the promotion and development of foreign export opportunities.
What can be claimed?
- Overseas representation expenses
- Marketing consultant expenses
- Marketing visits expenses
- Free samples expenses
- Trade fairs, seminars, in-store promotions expenses
- Promotion literature and advertising expenses
- Overseas buyers’ expenses
- Registration and/or insurance of eligible intellectual property expenses
Each application may receive a grant of up to $150,000 per application for a maximum of eight annual grants. The reimbursement model runs on a cash basis implying that if an invoice isn’t showing up as paid on your businesses bank statement as of 30 June 2021 it will not be eligible for reimbursement.
The Reform Model EMDG – opens 16 August closes 30 November
Reform model applications open from the 16th of August and close 30 November 2021. Businesses with a turnover of up to $20 million can apply and will receive upfront certainty for the duration of the grant agreement of 2 - 3 years.
There are 3 tiers of grants which can be received:
- Ready to export designed for first time exporters, where a maximum of $40,000 can be received each year over a two-year reimbursement period.
- Expanding exporters who wish to expand their presence within an established market, where a maximum of $80,000 can be received each year over a three-year reimbursement period.
- Established exporters expanding into new markets, where a maximum of $150,000 can be received over a three-year reimbursement period.
Eligible applicants must spend the grant money on eligible expenses for eligible products with a minimum of 50% co-contribution towards eligible expenditure.
Significant Program Changes
- The grant will move from a reimbursement model to an eligibility-based grant for marketing and promotional expenses to be spent in the grant period of 2 – 3 years.
- Eligibility threshold of annual turnover has reduced from $50 million to $20 million.
- The eligible EMDG recipients will receive installment payments for multiple years.
- The EMDG recipient will enter into a Grant Agreement nominating milestones, marketing expenses and related activity. Payments will be made after lodgment of milestone reports.
- A cap of $770,000 per organisation applies to the program and prior EMDG scheme payments are accessed in determining this cap.
The following will need to be provided upon application for the eligibility grant:
- Evidence of eligibility for the EMDG Grant.
- Evidence to show your product is eligible, including that it is of substantial Australian origin.
- Your plan to market.
- 2020-21 Financial statements showing that turnover is less than $20 million.
Of particular importance is the plan to market which will have act as the logic and explanation behind your intended marketing for the next 2 - 3 years. The plan to market includes measures of success, an overall financial budget and target market analysis as the reasoning behind your planned marketing expenditure.
Exporting businesses have two claims to be made by 30 November 2021 and early submission provides businesses with faster access to payments and greater certainty of export marketing support for the year ahead. Mazars is an approved Austrade EMDG consultant and can assist in submitting both claims prior to 30 November 2021. Enquire with your usual Mazars advisor, the author or our Grant specialist, Angela Winton via the form below or on:
Author: Angela Winton
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