With over 50 different government initiatives and programs, Hong Kong has a wide variety of ways to support startups and small businesses with funding and other resources. From developing a theory to scaling up a proven product, these initiatives should not be missed out by businesses looking for a boost.
In fact, we recommend that founders consider government funding before approaching venture capitalists and angel investors, for several reasons:
- Most government funding does not need to be paid back
- Most initiatives don’t require companies to give up equity in exchange for funding
- Most milestones requirements under these initiatives are not related to revenue or customer growth
- Companies can build traction through the programs and raise higher valuations when they do eventually approach venture capitalists and angel investors
Below are a selection of initiatives offered in Hong Kong for companies looking for funding at various stages of their development.
HKSTP Ideation
As the name implies, HKSTP’s Ideation program is designed to provide founders with space to test and validate ideas, and also teach them skills that can help them build a business and raise funds on their own.
Objective
Ideation helps tech-focused entrepreneurs validate an innovative idea and build the fundamental commercial and technical foundations for a startup.
Scope
The program is designed to help early stage startups in the seed stage of funding validate ideas and start building the company’s foundations. Training is provided to founders to equip them with vital skills like pitching and business modelling, and designating a business mentor to provide personal guidance. In addition, founders are provided work desks in Science Park’s co-working space.
Funding Amount
Up to HK$100,000 in seed funding.
Disbursement Method
Ideation is a non-matching grant. The HK$100,000 is released in three tranches after satisfactory assessment of three programme milestones; it is not paid in full upfront.
Eligibility Requirements
- Applicants must have an innovative idea supported by R&D and business planning.
- Individual applicants must be Hong Kong Identity Card holders aged 18 or above;
- Company applicants must be privately held companies limited by shares that are less than two years old at the application start date; and approved team applicants must incorporate within two weeks.
- Activities must relate to technology, such as electronics, green technology, ICT, or material and precision engineering.
Project Duration
1 year.
Cyberport Incubation Program
Arguably the most well-known incubation program in Hong Kong, with famous unicorn companies such as GoGoVan and Klook as alumni. Aside from funding, graduates of this incubation program will also have a chance to raise their Series A funding round with the Cyberport Macro Fund.
Objective
The programme provides advanced incubation to help digital-technology startups turn promising solutions into market-ready products, secure investment, develop business partnerships, and expand in Hong Kong and beyond.
Scope
The financial assistance supports startup growth and product development. Incubatees also receive access to technical and business guidance, mentors, investors and professional networks, business matching, market-exposure opportunities, and rent-free workspace or facilities for on-site participants.
Funding Amount
You can receive up to HK$500,000 in financial assistance, plus up to HK$200,000 in on-site rental subsidy.
Disbursement Method
Financial assistance is conditional on admission and compliance with agreed on milestones, released in tranches.
Eligibility Requirements
- Applicants must be a digital-technology company limited by shares less than seven years old, or be in the process of incorporation.
- Founders must collectively hold at least 51% of shares or absolute control
- The company must maintain a local presence through a founder, co-founder, or local full-time authorised representative working in Hong Kong.
- Same or similar projects must not have or have been in relevant Cyberport, HKSTP, or Hong Kong Design Centre incubation programs.
Project Duration
24 months.
HKSTP Incubation Program
Though there are some similarities with Cyberport’s Incubation Program, HKSTP’s program targets startups that have developed further and are looking to enter the market. Based in Hong Kong Science Park, the program is one of the best resources for startups looking to build in the city.
Objective
Hong Kong Science & Technology Parks offers a 3 year HKSTP Incubation Program for startups ready to go to market. On top of refining the product or service itself, the program also teaches startups how to build a business and scale up.
Scope
Funding supports R&D and business-development activities, with additional support in the form of account management, access to equipment, software and lab facilities, technical and management expertise, mentorship, investor and partner connections, professional services, and opportunities for market exposure.
Funding Amount
Up to a total of HK$1.29 million over three years, comprising up to HK$840,000 in financial subsidies and up to HK$450,000 in rental subsidies.
Disbursement Method
HKSTP Incubation provides milestone-based funding, where the first tranche of subsidies follows a satisfactory milestone assessment in the first year, and additional funding will be released as the subsequent milestones are met with satisfaction.
Eligibility Requirements
- The company must be a technology startup less than five years old when applying.
- It must operate in areas such as electronics, ICT, material and precision engineering, or green technology.
- Company founders must directly hold at least 51% of issued shares throughout the programme.
- At least two full-time staff, legally able to work in Hong Kong, must be employed
- At least half of your full-time team must be engaged in core R&D at an HKSTP-approved space.
- The company cannot be a current participant in another incubation program at HKSTP, Cyberport, or Hong Kong-Shenzhen Innovation and Technology Park.
Project Duration
3 years.
Enterprise Support Scheme (ESS)
The ESS focuses on the development of proprietary technology, particularly in advances that can improve efficiency and sustainability in the city’s dense urban environment.
Objective
The ESS encourages private-sector investment in in-house research and development for new or substantially improved products, services, or technologies with commercial potential.
Scope
Funding supports approved in-house R&D work on proprietary technology . Your proposal should explain the technological advancement being made, and present a delivery plan, project budget, as well as prove management capability, and commercial viability of the project deliverables.
Funding Amount
Up to HK$10 million total per approved project.
Disbursement Method
The ESS is a dollar-for-dollar matching grant, where the government will match contributions made by the company, pending milestones reached, in half yearly installments of up to HK$500,000 each.
Eligibility Requirements
- Any non-government-related company incorporated in Hong Kong can apply to be assessed by a panel.
- Applications that move forward will then have to present their scope, budget and milestones, etc. to the panel for further assessment.
Project Duration
Up to 24 months.
Public Sector Trial Scheme — Technology Companies
The Public Sector Trial Scheme for Technology Companies (PSTS-TC) targets technology companies that are developing a prototype that showcases the outcomes of their R&D. One notable alumni, battery developer GRST, used the PSTS-TC to test their batteries on public transportation and improve their efficiency.
Objective
The PSTS-TC aims to fund a product’s first deployment and sample production for companies looking to test the outcomes of their Hong Kong developed R&D.
Scope
The support funding covers prototypes, samples, and trials with local government bureaus or departments, statutory bodies, or Hong Kong Government-subvented welfare bodies. The project must use the company’s own R&D outcome and aim to develop a new product that is not already available in the market.
Funding Amount
Up to HK$1 million per project.
Disbursement Method
Funds will be reimbursed to the company two months after project completion and approval by the ITC following submission of an application for reimbursement, a project evaluation report, and an audited account of the project from an independent auditor
Eligibility Requirements
- The applicant must be a non-government-related technology company incorporated and based in Hong Kong
- THe outcomes of its R&D efforts must be owned by the company and developed primarily in Hong Kong for public sector trials.
Project Duration
Up to 12 months.
New Industrialization Funding Scheme (NIFS)
Companies that have a proven product but lack the funds to scale up manufacturing can look to the New Industrialization Funding Scheme (NIFS) for assistance in setting up modern production lines in Hong Kong. Suitable companies are looking to scale up production of their validated product utilizing smart-manufacturing.
Objective
NIFS subsidises manufacturers in establishing new smart production lines in Hong Kong’s industrial districts and industrial parks.
Scope
Funding covers expenditure directly related to establishing a new production line in Hong Kong. The whole line, or a significant part of it, must meet the scheme’s smart-manufacturing criteria.
Funding Amount
The Hong Kong Government will contribute up to one-third of project cost or HK$15 million per project, whichever is lower. In addition, a company can have up to three applications or ongoing projects at the same time, subject to an aggregate maximum of HK$45 million.
Disbursement Method
NIFS is a 1:2 matching grant, where the government will provide one part for each of the company’s two parts.
Eligibility Requirements
- Applicants must be incorporated in Hong Kong
- The proposed production line must be located in Hong Kong and meet the smart-manufacturing requirements.
Project Duration
Up to 24 months.
Funding Audits
Most funding programs require the applicants to have their projects audited by a Practicing CPA to ensure that the funds provided have been used as stated in their proposals, and that the applicants have complied with the requirements of the programs.
If you have a need for an audit or have questions about compliance with the program audits, drop us a message and we’d be happy to help!
