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What is the EMDG?
The EMDG stands for the ‘Export Market Development Grant’ and reimburses up to 50% of eligible export promotion expenses above $5,000.
Do you have a product that can be easily distributed overseas like software or information technology?
If so, why limited yourself to Australia?
The EMDG, administered by Austrade, encourages small- and medium-sized Australian businesses to develop export markets by providing grants for promotional activities.
Eligible EMDG Expenditure
You may claim for EMDG expenditure on specific export promotional activities undertaken during the financial year before the application period. For your first EMDG Application you may claim expenses incurred over the last two financial years.
Nine categories of activities can be claimed in the EMDG Application.
- Overseas representatives – all costs to have an overseas representative act on your behalf
- Marketing consultants – the cost of engaging a consultant to undertake export market research
- Marketing visits – the cost of travel such as airfares plus $350 per day for accommodation.
- Free samples – the cost of providing free samples of the product you are promoting for export
- Trade fairs, seminars, in-store promotions – the cost of participating in an international trade fair
- Promotional literature & advertising – the costs of promotional material, such as brochures and websites
- Overseas buyers – the cost of bringing potential buyers who are non-residents to Australia
- Registration and/or insurance of eligible intellectual property – payments made to patent and trademark attorneys
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How much can you get through the EMDG?
The way they calculate the rebate is:
Rebate = ([Eligible expenditure] – [$5,000]) x 50%
So, a quick example:
You spend $55,000 on overseas marketing in one year.
Take off the first $5,000 = $50,000
Multiply x 50% = $25,000 cash rebate.
You can claim the EMDG up to 8 times.
EMDG Grant Limit
The maximum grant is $150,000. But, on average, most companies get around $34,000.
In the last financial year, grants worth $131.6 million were paid to 3,706 different companies.
The EMDG grant has had its annual funding of $131 million frozen since 2014.
On 1 April 2020, the Federal Government announced an increase in funding for the Export Market Development Grants (EMDG) scheme. Funding for the scheme will increase by $49.8 million in the 2019-20 financial year, allowing exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.
This supplements the additional $60 million already committed by the Government, and brings EMDG funding to its highest level in more than 20 years at $207.7 million for the 2019-20 financial year.
In addition to increased EMDG program funding, the Minister for Trade, Tourism and Investment, Senator the Hon Simon Birmingham has waived the EMDG export performance requirements for 2020–21. This will ensure businesses will not have their EMDG reimbursement reduced should their export income fall due to COVID-19.
To further assist exporters in 2020–21, the Minister has determined the Initial Payment Ceiling Amount (IPCA) to be $100,000. This is the highest IPCA since the scheme’s budget was capped in 1997–98, and a significant increase from the $40,000 IPCA set for the past five years.
How and when is the EMDG paid?
The EMDG is paid out in a series of tranches.
- Initial payment is around $40,000
- Second second payment is a percentage of your eligible rebate based on the remaining funds in the grant pool. This can range from 25% to 75%.
Timing of EMDG payments
A payment ceiling is announced at the beginning of every financial year.
If your grant is under this, you will receive all of your payment in the first round.
If it is above the ceiling, you will receive part of your payment (up to the payment ceiling).
Applicants who don’t receive their entire grant will receive a second payment.
When is the second export grant payment?
The second payment comes at the end of the financial year.
It is determined based on your remaining provisional entitlement, and the funding remaining to the EMDG.
It is important to be aware that you may not receive all of your provisional payment.
How much can you get back?
For your first two EMDG grants, Austrade will give you:
Grant = 50% of (total eligible expenses – $5,000)
From your third year onward, you need to be exporting!
As the grant is now related to how much income you are generating from overseas
You will now get the lesser of:
- Year 3 – 40%
- Year 4 – 20%
- Year 5 – 10%
- Year 6 – 7.5%
- Year 7 – 5%
- Year 8 – 5%
You can just wait until you are earning enough money to justify it.
You must complete and submit your online application, including all required documents, between 1 July and midnight (AEDT) 30 November 2020, or use an approved EMDG Quality Incentive Program (QIP) Consultant who can lodge a claim on your behalf until midnight Australian Eastern Daylight Time (AEDT) 2 March 2021.
All consultants can lodge EMDG application on behalf of applicants during the standard lodgement period of 1 July 2020 to midnight (AEDT) 30 November 2020. Approved EMDG Quality Incentive Program (QIP) Consultants can lodge applications until midnight (AEDT) 2 March 2021.
Temporary removal of the export performance requirements for exporters applying for their 3rd to 8th grant.
The Government has waived the export performance test for the 2019–20 grant year. This means the grant amount will be determined by eligible expenditure only and will not be affected by the value of exports achieved.
This is in recognition of the impact COVID-19 has had on the ability of businesses to export their products and capacity and effectiveness of marketing and promotional activities.
Eligibiltiy of promotional expenses impacted by COVID-19
Austrade will treat marketing and promotional activities (e.g. trade show or marketing visit) cancelled due to COVID-19 as having taken place for the purposes of EMDG eligiblity. As long as all other eligibility criteria are met, these expenses will be eligible for EMDG reimbursement in 2019–20 and 2020–21.
If you have been paid for incurred expenses [by a third party such as an event organiser], or are entitled to be paid (such as refunds or insurance), these expenses are not eligible for EMDG.
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If you want professional assistance to submit your application, you may consider engaging an EMDG consultant.
Consultants play an important role in supporting Australia’s current and future exporters by promoting awareness of the Export Market Development Grants (EMDG) scheme, lodging applications on behalf of businesses and supporting the assessment process.
Do you need an EMDG consultant.
Contact us for assistance.
The average claim value of an EMDG consultant prepared claims has been significantly higher than that of self-prepared claims over the past 3 years, with consultant-prepared claims averaging $51,587 and self-prepared claims $47,229 this year.
How popular is the EMDG?
The number of EMDG claims received in the 2017 year increased 6.6 per cent above the previous year. Of the 3,771 applications, 1,444 were submitted by first-year applicants, an increase of 13.6 per cent from the number of first-year applicants last year, and approaching double the number recorded in 2013.
This popularity of the scheme among new applicants shows healthy levels of export activity among new exporters.
|Grant year||Years in scheme = 1||Years in scheme = 2+||Total claims||Change from previous year|
Of the total value of EMDG claimants’ markets this year:
- 41% – Asia
- 37% – North America.
- 6% – Oceania, Africa and South America
There were 1452 EMDG claimants active in the US market this year, with a total of $780,218,933 claimed (35 per cent of total claims). China was the next largest market in dollar terms, with 514 businesses claiming $310,568,349 (14 per cent of total claims).
The proportion of claims from the services industries increased from 66.5 per cent last year to 67.5 per cent this year.
Manufacturing and primary industries both decreased slightly as a proportion of the claim population. Manufacturing now accounts for 28.2 per cent of claimants and primary industries account for 4.3 per cent.
Tourism accounted for 12.2 per cent of EMDG applications this year, while the education industry accounted for 5.4 per cent.
Is EMDG classified as income?
YES, the Export Market Development Grants are assessable income and need to be included in your company income tax return.
Government payments such as Grants are assessable income.
Some of the recipients of the EMDG program are:
Freelancer offers a way for employers and freelancers to connect in a global digital space.
Unable to source a local contractor for a simple data entry task, Matt Barrie turned to the Internet and got 74 replies overnight from all over the world.
Barrie sensed an opportunity and, from this start in 2009, the founder of Freelancer.com has built a global online crowdsourcing and freelancing marketplace that enables potential employers to post jobs that freelancers can then bid to complete.
Australian firm HIVERY has solved business problems in the retail and FMCG sectors in Australia, the US, Japan and China using artificial intelligence (AI), helping customers generate ROI never seen before.
In 2014, HIVERY conducted an experiment with a fleet of 60 vending machines in Newcastle to test the ability of machine learning to optimise sales by recommending changes to the product assortment and space-to-sales ratio of available products.
Once the AI system was trained, it made recommendations that were implemented for those 60 machines and, a few months later, the changes had resulted in a 15 per cent increase in sales and an 18 per cent reduction in restocking visits.
When intern Ryan Griffen brought an idea for a children’s show to management at Goalpost Pictures, nobody could have imagined that the adult drama that grew from his concept would achieve one of the highest levels of export sales for a television series in recent Australian history.
First broadcast in June 2016, by the end of 2017 the first season of television show Cleverman had achieved total sales in excess of $4 million.
Tama Berkeljon was at the top of a ladder changing yet another blown light bulb while an entire film crew waited to continue work when he decided there had to be a better way to light a movie set.
So he designed and created a rig of 100 LED ring lights – one of the first high-power, large-scale LED installations to be used in a film industry environment.
The success of that lighting rig was the seed that grew into Outsight, a company that designs and manufactures high-power LED lighting systems for the film and television industry.
From inception, Outsight has focused on designing reliable and innovative equipment that solves problems in the film and television industry, where there is constant pressure to provide more and better content on a reduced budget.
After nearly a century of boot making, EMDG recipient Redback Boots has a rich history of success in finding product needs in the marketplace and delivering quality solutions to meet those needs.
Started by three Greek immigrant brothers in 1927, the business that became Redback Boots remains a family-owned private company that spans five generations.
Redback has been exporting boots since the early 90s and has a solid footing overseas but is moving to take a more considered hand on the reins globally as part of the current refocusing on data-driven market analysis.
The company heard about the funding available through EMDG for companies expanding their presence in overseas markets and felt that it perfectly complemented its current plans.
10 September 2020 – Backing Australian exporters to go global
The Morrison Government is backing Australian businesses to grow their exports and create jobs through reforms to the Export Market Development Grants (EMDG) scheme, after an independent review of financial assistance for small and medium enterprise exporters.
The EMDG scheme is a key Government financial assistance program to help aspiring and current exporters increase their marketing and promotional activities in international markets. Last year alone over 4000 Small and Medium Enterprises accessed the EMDG scheme, employing almost 69,000 Australians and generating exports worth $3.7 billion.
27 August 2020 – Export grants helping SMEs find OS markets
EMDG has been in place for decades, and remains a key element of the government’s industry-support agenda.
It provides up to half of the eligible marketing expenses that companies have spent on export market growth, recognising – as Federal Trade and Tourism Minister Simon Birmingham said in April while injecting an extra $49.8m into the program – that companies investing “in good faith to lift Australia’s exports… are unlikely to see immediate return on those investments.”
17 June 2020 – EMDG pre-lodgement period now open
Good news! You can now access the Export Market Development Grants (EMDG) application form to start completing the 2020 grant year applications.
Please note that whilst the application form is open, you won’t be able to submit your application until 1 July 2020.
To use the form, you will need to have MyGovID set up and authorisation to act on behalf of the business.
1 April 2020 – EMDG gains $49.8 million boost to help exporters fight COVID-19
The Morrison Government will inject an extra $49.8 million into the Export Market Development Grants (EMDG) program in the 2019-20 financial year, allowing exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.
Federal Trade and Tourism Minister Simon Birmingham said today’s funding boost would provide much needed relief and a timely cash flow injection for exporters and tourism businesses within the scheme who were doing it tough.
3 October – EMDG Under Review
The Morrison Government will review the Export Market Development Grants scheme as part of its commitment to continue growing the number of Australian exporters and the total value of Australian exports.
24 September – Global Victoria Export (GVx) Summit 2019
GVx will be a full-day, guided experience to engage, explore and extract strategies for your export ambition. GVx’s insightful panel sessions will be led by some of Victoria’s most successful exporters currently making their mark in international markets.
A $60m funding boost to EMDG
The Export Market Development Grants (EMDG) scheme will get a $60 million funding boost from the federal government to encourage more Australian SMEs to export.
Trade Minister Simon Birmingham said the additional funds, to be allocated over the next three years, showed the Government’s support for Australian businesses with export ambitions.
“We recognise the enormous contribution our exporters make to the economy, to creating more jobs and that’s why we’re backing them through this scheme,” Senator Birmingham said.
The Export Market Development Grants (EMDG) program provides reimbursement for export promotion expenses for businesses with annual turnover of less than $50 million. Eligible activities include attending trade shows overseas, digital advertising, marketing consultant fees and visa fees.
The scheme reimburses up to 50 percent of eligible expenses above $5000, with a total grant on offer of $150,000.
EMDG recipients feature in export awards
Export Market Development Grants (EMDG) scheme recipients performed well at the 56th Australian Export Awards, with seven of the 13 category winners being current or former clients of the program.
EMDG recipients Aspen Medical and SEAPA were jointly awarded the top prize as Australian Exporter of the Year at a ceremony held at the National Arboretum in Canberra on 27 November 2018.
Recipients who won their award categories came from a wide range of industry sectors, including pharmaceuticals, information technology, clinical research, bridal fashion and mining technology.
Of 112 business categories at state level, 70 of the category winners are or have been EMDG recipients.
The Export Market Development Grants (EMDG) scheme is a financial assistance program for Australian small- to medium-sized businesses.
It provides an incentive for current and aspiring export-ready businesses to increase their international marketing and promotion expenditure to achieve more sustainable international sales.
In 2017–18 the EMDG scheme made a total of 3706 grants, worth $131.6 million, to qualifying Australian exporters.
8 January 2019 – EMDG recipient prosecuted for fraud
An investigation by Austrade’s Special Investigations Unit has resulted in the conviction of a person for offences committed against the Commonwealth with respect to the submission of EMDG applications.
The former principal of an Educational College, which is no longer trading, pleaded guilty in Melbourne Magistrates Court in June to dishonestly obtaining financial advantage and using a forged document, resulting in attempted and actual fraud upon the Commonwealth of $97,486, including $46,486 in grants paid due to fraudulent information.
For making false claims about cheque payments and electronic fund transfers, and for falsifying international money transfer receipts, the court sentenced the person to a five month term of imprisonment, wholly suspended for 18 months with a $5,000 surety bond. He was ordered to pay $46,486 compensation, a sum equal to the fraudulently obtained EMDG funding.
Austrade detected the fraud as part of its risk management and fraud prevention strategies and sought assistance from the Australian Federal Police in executing search warrants.
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