EXPORT MARKET DEVELOPMENT GRANT TYPES OF ELIGIBLE EXPENDITURE 1. OVERSEAS REPRESENTATION General Where an applicant engages an overseas representative to represent the company on an ongoing basis then the costs paid to the overseas representative will be eligible for a grant. To be considered as promoting on an ongoing basis, a period of no less than 12 months is required. The total expenditure which can be claimed for overseas representatives is capped at $200,000 per annum. Types of Representation Arms length Agent or Buyer Overseas Representation may be through a new or existing agent with a fee payable regularly, i.e. on a monthly or quarterly basis. Through an Overseas Associated Company Where extra staff are appointed or existing staff are allocated to spend a proportion or all of their time on promoting the applicant s eligible goods or services. (c) Director/employee Where an individual is appointed to take up a position overseas to promote the applicant s eligible goods or services. 2. MARKETING CONSULTANTS Where an applicant engages a consultant to undertake market research or marketing on a fee basis, then provided that the consultant is at arm s length from the applicant, the consultant s fees and expenses may be eligible for a grant. In order to be considered at arm s length, the consultant must be deemed not to be associated with the applicant i.e. a director of the applicant, a relative of a director of the applicant, an employee, etc. The total expenditure that can be claimed for marketing consultants is capped at $50,000 per annum. 3. MARKETING VISITS Fares To be eligible, must be incurred for promotional purposes, market research, investigations into market potential etc.
2 Overseas Travel Allowance Austrade will allow a travel allowance of $300 per day as eligible expenditure for each working day spent promoting eligible goods/services. A maximum of 21 days per visit for each person who travels is allowable. 4. COMMUNICATIONS The cost of communicating with your representatives, business contacts and for the purpose of soliciting business is eligible i.e. telephone, facsimile and internet costs. If actual expenses are not claimed you receive an automatic 3% addition to your calculated grant. 5. FREE SAMPLES The production cost of free samples provided to potential or existing overseas buyers for promotional purposes is eligible for a grant. Samples of tourism services provided within Australia are also eligible. For costs to qualify the samples must satisfy several basic criteria: They must be samples representative of goods being promoted and sold, or goods to be promoted and sold by the applicant. They must be given away free for eligible promotional purposes. (c) The number of samples given should not be related to the level of sales achieved by an agent, distributor or buyer. 6. TRADE FAIRS & PROMOTIONAL EVENTS Expenses in relation to trade fairs, seminars, in-store promotions, international forums, private exhibitions or similar promotional events may be claimed. 7. PROMOTIONAL LITERATURE & ADVERTISING The external costs of producing brochures, videos, website etc as well as advertising i.e. magazine/newspaper is eligible.
3 8. OVERSEAS BUYERS COSTS The cost of bringing overseas buyers to Australia for marketing purposes. Eligible costs include fares, accommodation and meals. This expense category is capped at $45,000 per annum. 9. PATENTS & TRADEMARKS The cost of international patents and trademarks are eligible up to a maximum per claim period of $50,000. A. BASIS OF ASSESSMENT OF EXPENDITURE For expenditure to be assessed by Austrade as eligible for any grant year the expenditure must meet the following criteria. The expenditure must be incurred by the applicant in the grant year. The expenditure is eligible only to the extent to which it relates to the promotion of eligible goods and/or services, i.e. expenditure will be pro-rated if there is - (i) (ii) promotion of ineligible goods/services non-promotional activities For expenditure to be assessed by Austrade as eligible for any grant year, the expenditure must be physically paid prior to the 30th June of that grant year by the applicant company. Further, any payments made by cheque must be cleared through your bank account by 30th June. To overcome any potential problems that might arise towards the end of June, it is advisable to use bank cheques, drafts or electronic transfers to ensure that the amounts are cleared through your bank account and accepted as paid by Austrade. Austrade will accept contra entries as evidence of incurrence of expenditure only if the contra can be shown to be fully accounted. Where a contra entry involves an increase in debt, this is unlikely to be accepted as incurrence of expenditure by Austrade. Generally, it is advisable to pay amounts rather than use contra entries and as always, if in doubt, speak to Exportise for clarification of your circumstances. Austrade do not accept pre-payments of expenditure. For expenditure to be accepted in a grant year, both the payment must be made and the service be provided. Where payment has been made but the service is either partly or wholly unprovided by 30th June, Austrade will only allow those expenses in the grant year where the services are completely provided.
4 B. MINIMUM EXPENDITURE AND GRANT CALCULATION Any company wishing to access the EMDG Scheme must incur a minimum of $20,000 eligible expenditure to qualify for assistance during any grant year. The expenditure threshold is $10,000 per year and a grant rate of 50% is applied for all expenditure in excess of this threshold. As mentioned previously, due to the $150m cap on funding, the second payment may be less than what was initially determined by Austrade. Any first year applicant wishing to lodge a two year claim must incur a minimum expenditure of $20,000 over the two financial years to be eligible. C. MAXIMUM GRANT ENTITLEMENTS The maximum grant entitlement for each applicant (Refer Para. I for Group of Companies) is $150,000. Any applicant may receive up to 7 grants through the Scheme. Grants of less than $3,500 which were received prior to 1984/85 will be removed from the applicant s history and consequently reduce the number of grants notionally received from Austrade. 110% RULE Once a claim has been lodged you are limited to increasing the original assessed claim by a maximum of 10%. It is therefore important to ensure that you provide Exportise with all of the appropriate expenditure prior to lodgement so they can maximise your entitlement. D. APPROVED JOINT VENTURES Approved Joint Ventures are groups of companies with special approval from Austrade to lodge a joint application. Once approved, and Exportise will show you how to become approved, all parties' eligible expenditure is claimable as for individual companies. Talk to Exportise about how you can benefit from these provisions. E. APPROVED BODIES An approved Body is an organisation representing an industry whether national, state or regional. The body does not export in its own right but promotes the exports of its members. Talk to Exportise about how your association could benefit from these provisions.
5 F. CHANGE OF OWNERSHIP/ORGANISATION STRUCTURE If you have experienced changes to your business through merger, take-over, joint venture or simply change of legal structure, this could affect your eligibility. Talk to Exportise to clarify your position and ensure you can maximise your entitlements. G. EMDG ELIGIBILITY RELATING TO TRADE WITH EXCLUDED COUNTRIES Expenditure of any kind that relates either directly or indirectly to trade with New Zealand is ineligible. Export earnings relating either directly or indirectly to trade with New Zealand do not qualify as export earnings. Expenses in relation to Iran and North Korea are also excluded. H. GRANTS ENTRY TEST Applicants lodging their first EMDG claim must pass a Grants Entry Test. Please contact our office for further details. I. RELATED COMPANIES Members of a corporate group are limited to an aggregate grant of $250,000 for the grant year. If you have a group of companies please refer to Exportise for clarification. Where the export earnings of a group of related companies exceeds $50 million, there will not be a grant entitlement under the EMDG legislation if all of these companies lodge claims. However, provided companies in such a situation only lodge claims where export earnings total less than $50 million, then each of those companies will receive grants to their calculated entitlement. This section of the legislation is particularly technical and would require close consultation with Exportise before any claims are lodged. Export earnings would need to be accurately detailed and assessed. J. TOTAL TURNOVER LIMIT
6 If a company s total turnover (domestic and export) exceeds $50m in the grant year then they will be ineligible to claim an EMD Grant for that year. This test is reviewed on a yearly basis. K. EXPORT EARNINGS TEST Claimants who have not previously received EMD Grant payments are entitled to receive two grants before being subjected to an earnings test. The earnings test will apply to all other claimants with the exception of approved bodies. After receiving two grants, the maximum grant entitlement will be $150,000 or a percentage of export earnings received during the year, whichever is the lesser according to the following formula: Year 1 $150,000 Year 2 $150,000 Year 3 Year 4 Year 5 Year 6 Year 7 $150,000 or 40% of export earnings, whichever is the lesser $150,000 or 20% of export earnings, whichever is the lesser $150,000 or 10% of export earnings, whichever is the lesser $150,000 or 7.5% of export earnings, whichever is the lesser $150,000 or 5% of export earnings, whichever is the lesser For the purpose of the export earnings test FOB value is used for goods. Earnings are counted on the date that funds are received.
7 L. ELIGIBLE ACTIVITIES Eligible Goods Goods manufactured in Australia are deemed eligible for grant assistance by Austrade. Goods manufactured overseas can be deemed to be Australian made by Austrade for grant purposes. If you are in this situation please contact Exportise as a separate submission to Austrade is required. Eligible Services Most services supplied inside and outside of Australia to a non-resident are eligible provided Austrade is satisfied that Australia will derive a significant net benefit from the supply of the service. There are some specific exclusions to eligible services. To confirm your eligibility please discuss what you are promoting with your Exportise consultant. (c) Intellectual Property Rights (c) Tourism Services Tourism services supplied in Australia to foreign tourists who are visiting Australia on a temporary basis (e) Know How M. EXPORTISE PACK For the sake of simplicity in record keeping, we have developed an Exportise Pack as a comprehensive guideline to assist you in gathering documentation for your claim. This system has been designed to ensure all eligible expenditure is captured to maximise your claim. If you have not already been provided with one of these packs, please speak to your Exportise consultant. N. CLAIM LODGEMENT
8 Claims may be lodged with Austrade from 1 July after the grant year in question is completed. Exportise can prepare claims for lodgement on 1 July provided all documentation is in place. O. CLAIM ASSESSMENT Claims are assessed and paid by Austrade in the order in which they are lodged. Claims lodged by the end of September generally get paid within 4-6 weeks, whereas claims lodged in November can take up to five months to get paid. The assessment process which is carried out varies according to Austrade s risk assessment process. The risk assessment is based on a number of factors including the accuracy of any previous claims, comparisons with claims made by companies in the same industry and the prior performance of the consultant who has lodged the claim. Accordingly a good risk assessment result will provide a speedy grant payment. CLAIMS MUST BE RECEIVED BY AUSTRADE BY 30TH NOVEMBER. NO EXTENSION OF TIME FOR LODGEMENT IS POSSIBLE.