Michael Derin
The Export Market Development Grants (EMDG) program is an Australian Government initiative that provides key financial funding to current and aspiring exporters. The EMDG was created to incentivise small and medium-sized businesses (SMBs) to develop export markets, which subsequently stimulates the Australian economy.
Changes to the EMDG program
Previously, SMBs would incur expenses prior to claiming an export grant from The Australian Trade and Investment
Commission (Austrade) in the subsequent financial year. However, changes to the EMDG program were recently legislated and came into effect 01 July 2021.
The EMDG scheme was remodelled from a reimbursement system to a grant scheme with the purpose of providing more upfront certainty. These changes also encouraged greater confidence among applicants given that EMDG applications could be submitted in fulfilment of eligible promotional activities that SMBs planned to undertake, rather than submit export promotion expenses that had already been incurred (as was the case before these changes took effect).
Download EMDG Eligibility checklist
How does the EMDG work?
The EMDG is administered by Austrade and is separated into three stages of a business export journey, namely:
- Tier 1
- Tier 2; and
- Tier 3
SMBs should apply for the grant tier that is most suitable to their particular business needs. These tiers are outlined below. To learn more, please get in touch with our EMDG consultants.
Tier 1
For eligible SMB exporters who:
- Are ready to export in the grant year;
- Have not exported before; and
- Have appropriate skills in marketing eligible products in a foreign country.
Grant details:
- Grant agreements are offered for up to 2 years.
- A maximum of AUD 40,000 will be provided per year.
Tier 2
For eligible SMB exporters who:
- Are exporting eligible products; and
- Are seeking to expand export promotional activity for eligible products.
Grant details:
- Grant agreements are offered for up to 3 years.
- A maximum of AUD 80,000 will be provided per year.
Tier 3
For eligible SMB exporters who:
- Are exporting eligible products;
- Are seeking to expand export promotional activity for eligible products; and
- Are ready to make a strategic shift in the marketing of eligible products in a foreign country, or expand markets across or to new countries.
Grant details:
- Grant agreements are offered for up to 3 years.
- A maximum of AUD 150,000 will be provided per year.
How does Austrade determine how much you will receive for your EMDG?
The export grant amount will vary depending on the demand (defined by the number of eligible applicants in each round), and the available budget for that respective round.
Once EMDG applications have been assessed, Austrade will determine the amount of funding available to all eligible applicants. If you meet the eligibility requirements, you will receive an EMDG agreement containing your grant amount. This agreement will specify that your expenditure must match the dollar value of the EMDG that you receive to be eligible to acquire the funds.
What does EMDG round mean?
Each round is indicative of the year that the EMDG application applies to. For example, round 2 EMDG applications opened on 06 July 2022 and closed on 17 August 2022.
Since changes to the EMDG program dictate that EMDG applications will now be submitted prospectively, round 2 EMDG grants will provide funding for eligible export promotional activities conducted between 01 July 2022 and 30 June 2023.
How many times can you apply for the EMDG program?
SMBs can apply for 3 different grants over 8 years. For example, an SMB may decide to apply for Tier 1 once (whereby grant agreements are offered for up to 2 years), followed by Tier 3 twice (whereby grant agreements are offered for up to 3 years), totalling 6 years.
Eligibility requirements for EMDG
There are several eligibility requirements that SMBs must satisfy to receive an EMDG grant. To view these in detail, visit Austrade or get in touch with our EMDG specialists.
In general, EMDG applicants must:
- Have had less than AUD 20 million in turnover in the previous financial year; Be Australian;
- Have an Australian Business Number (ABN);
- Use the funds for promotional activities in foreign countries or for training activities to develop skills to market eligible products abroad;
- Use the funds for an eligible product that is of substantially Australian origin;
- Use the EMDG funds for expenses in one or more of the eligible categories.
A few quick tips and steps to follow when applying for EMDG funding
Five quick tips when applying for EMDG
1. Make sure you are eligible!
2. Make sure you keep records in real time.
3. Make sure you have strong documentary evidence ready to support your EMDG application.
4. Make sure you get in touch with an experienced EMDG advisor who can apply eligibility criteria to your specific case, review your paperwork, write plans, and assess up front whether or not you would be eligible for the EMDG program, thereby saving you time and money.
5. Make sure you submit a completed EMDG application before the closing date.
Seven steps to follow when applying for EMDG
1. Assess your eligibility
2. Engage an EMDG Grant specialist
3. Grant application form preparation
4. Tailor responses to selection criteria
5. Have strong documentary evidence
6. Submit application before closing date
7. Be audit ready
Applying for an EMDG grant is a complex process. An EMDG consultant will help to streamline the process by assisting with eligibility and record-keeping requirements, reviewing and collating documents and audit files, expenditure schedules, strategies to optimise funding by choosing an appropriate tier, devising a market plan, and ensuring all compliance protocols are upheld.
XLNC MAGAZINE | No. 11 | Spring 2023