Small and medium-sized enterprises (SMEs) form the backbone of Hong Kong’s vibrant economy, contributing significantly to employment, innovation, and economic development. Recognizing the crucial role these entities play, the Hong Kong government has implemented various SME funding initiatives to support their growth and sustainability.

In this article, BBCIncorp explores the key government programs that assist Hong Kong SMEs. Let’s see what government funding is available for your business!

Overview of SME funding in Hong Kong

Here’s what you should know about the model known as small and medium-sized enterprises (SMEs) in Hong Kong.

What business is considered a Hong Kong SME?

The Hong Kong Trade and Industry Department defines SMEs as manufacturing enterprises employing less than 100 persons and non-manufacturing enterprises with a workforce of less than 50 staff. This includes a wide range of businesses, from small boutique shops to mid-sized tech startups.

Statistically, Hong Kong has a massive number of over 340,000 SMEs, accounting for 98% of all enterprises in the area (2021). Their combined employment, excluding the civil service, takes up approximately 45% of the total employment in the region.

Due to its strategic geographical location as a gateway to Mainland China and the Asia-Pacific region, a substantial portion (30%) of SMEs in Hong Kong actively engages in the import and export business.

However, because of their constrained scope, these entities frequently encounter hurdles such as limited resources, market competition, and regulatory complexities. For this reason, various incentives were carried out under the name “SME funding”.

What is SME funding?

Small and medium-sized enterprises (SMEs) funding in Hong Kong refers to the financial support and resources provided by various entities to assist small and medium-sized businesses in the region. This typically includes:

  • Government funding for start up businesses;
  • Funding from financial institutions; and
  • Funding from private organizations.

These programs are designed to empower businesses to proactively navigate challenges, innovate, and contribute to the overall economic vibrancy of Hong Kong. Let’s explore the most common ones in the following section.

Top 7 preferred funding initiatives for Hong Kong SMEs

Below are the most notable funding initiatives available for SMEs in Hong Kong.

SME Financing Guarantee Scheme (SFGS)

Administered by the Hong Kong Mortgage Corporation Insurance Limited (HKMCI), the SME Financing Guarantee Scheme aims to help SMEs secure loans from participating lenders to pursue business needs.

The target recipients for SFGS usually consist of businesses registered in Hong Kong that are not listed companies, lending institutions, and affiliates of lending institutions.

Under this Scheme, the HKMCI may offer guarantee coverage to eligible enterprises approved by the lenders for 50%, 60%, or 70% of relevant credit facilities. Notably, in a concerted effort to assist businesses facing adverse effects from the pandemic outbreak, special guarantee coverage of up to 100% is available, with a maximum repayment period extended to 7 years.

Technology Voucher Programme (TVP)

Introduced in November 2016, the Technology Voucher Program (TVP) is carried out to assist local enterprises and organizations in leveraging technological services and solutions. The final objective is to enhance productivity or upgrade and transform their business processes.

The target beneficiaries of this government funding for start up businesses are non-listed local enterprises with substantial business operations in Hong Kong.

Similar to the BUD Fund, the TVP is overseen by the Hong Kong Productivity Council. Below are some significant parameters:

  • Funding support: Eligible projects can benefit from a substantial 75% funding support.
  • Cumulative funding cap: There is a cumulative funding cap of HK$600,000 for each company participating in the program
  • Project limit: Companies are allowed to apply for funding for up to 6 projects.
  • Project duration: Projects under the TVP are generally expected to be completed within a 12-month timeframe.

Dedicated Fund on Branding, Upgrading, and Domestic Sales (BUD Fund)

Managed by the Hong Kong Productivity Council, the BUD Fund supports Hong Kong SMEs in enhancing their competitiveness and expanding their business outside Hong Kong.

Specifically, the BUD Fund offers financial help to individual non-listed Hong Kong businesses registered in Hong Kong under the Business Registration Ordinance.

These businesses can use the funding for:

  • Mainland Programme: Support for projects that help them expand in Mainland China (i.e. improving their brand, upgrading how they run their business, and boosting sales in Mainland China)
  • FTA and IPPA Programme: Funding for projects that target markets where Hong Kong has signed Free Trade Agreements (FTA) and/or Investment Promotion and Protection Agreements (IPPA).

Several key points of this scheme are:

  • Funding support: The government covers a maximum of 50% of the total approved project cost.
  • Cumulative funding cap: The cumulative funding limit for all approved projects is HK$7,000,000 per enterprise.
  • Project limit: Enterprises are eligible for funding for a maximum of 70 approved projects.
  • Project duration: Projects falling under a general application and a simplified “Easy BUD” form should be completed within 24 months and 12 months, respectively, from the approval date.

Innovation and Technology Fund (ITF)

The Innovation and Technology Fund (ITF), managed by the Innovation and Technology Fund Commission, was created to increase economic productivity, added value, and competitiveness.
Through the ITF, the government hopes that Hong Kong companies can be encouraged and assisted to upgrade their technology level and introduce innovative business strategies.

This scheme extends its support to a variety of start-ups, including academic and research institutions, R&D Centres, designated local public research institutes, and universities funded by the University Grants Committee (UGC).

Specifically, the fund is structured into five distinct categories:

  • Supporting Research & Development
  • Facilitating Technology Adoption
  • Nurturing Technology Talent
  • Supporting Technology Start-ups
  • Fostering an I&T Culture

For more information on each type of ITF program, we recommend visiting the Innovation and Technology Commission’s official site.

SME Export Marketing Fund (EMF)

Managed by the Trade and Industry Department, the Export Marketing Fund encourages SMEs to expand their markets beyond Hong Kong.

This scheme is applicable for non-listed Hong Kong enterprises with substantive business operations in Hong Kong that are not organizers/co-organizers/ service providers of the promotional activities.

The scope of this fund encompasses these activities:

  • Trade exhibitions within or outside Hong Kong with a focus on local or foreign markets beyond Hong Kong.
  • Online trade exhibitions
  • Business missions involving physical visits to locations outside Hong Kong
  • Online business missions to facilitate remote business interactions
  • Advertisements/ Promotional activities on trade publications, primarily directed at markets outside of Hong Kong.
  • Export promotion via Electronic Platforms/Media with a primary focus on markets outside Hong Kong.
  • Corporate Website/Mobile Application Enhancement to develop or improve a corporate website or mobile application owned by the applicant enterprise, primarily targeting foreign markets.
  • And similar projects.

Qualifying businesses are eligible to receive a substantial 50% funding support, subject to a maximum cap of HK$1,000,000.

Enterprise Support Scheme (ESS)

Administered by the Innovation and Technology Commission, the Enterprise Support Scheme (ESS) is designed to aid local companies, including SMEs, in enhancing their technological capabilities, fostering technology adoption, and promoting innovation.

To be eligible, a company must be incorporated in Hong Kong with a current business registration certificate. Additionally, it must strictly not be a government-subvented organization or a subsidiary of any such organization.

Key features of the scheme consist of:

  • Funding Support: The government covers a maximum of HK$10,000,000 per project.
  • Project Duration: Projects must be completed within 24 months from the approval date.
  • Intellectual Property Rights: The recipient is the owner of Intellectual Property Rights.
  • Upper quotation limit of procurement for goods and services: HK$1,360,000

CreateSmart Initiative (CSI)

The CreateSmart Initiative (CSI) is a funding program in Hong Kong that aims to foster the development and growth of the creative industries. Launched by the Hong Kong Special Administrative Region (HKSAR) Government, CSI is administered by the Create Hong Kong (CreateHK) office to stimulate creativity and innovation in various sectors.

The main components of the CreateSmart Initiative include:

  • Financial support for creative projects
  • Support for film production
  • Design initiatives
  • Digital entertainment
  • Capacity building and talent development
  • Promotion of creative entrepreneurship
  • Collaboration and partnerships within the industry

In terms of funding support, CSI operates on a grant basis. The grant covers the net approved project cost, taking into account factors such as expected income during the project period and any sponsorship or funding from other sources dedicated to the project.

Simply put, this initiative underscores the commitment of the HKSAR Government to propel the creative industries forward, promoting a vibrant creative landscape in Hong Kong.

The aforementioned options represent the top 7 popular choices. However, numerous additional incentives cover a range of areas, including environmental efforts, traffic-related initiatives, logistics, and the travel industry.

Apart from the government’s pioneering efforts, Hong Kong also offers numerous benefits for doing business, so setting up a company here is definitely a great idea if you are interested in starting your business here.


Government funding initiatives play a crucial role in fostering the growth and sustainability of SMEs in Hong Kong. By providing financial support, and offering comprehensive assistance, these programs contribute to a thriving ecosystem where SMEs can innovate, expand, and contribute to the overall economic prosperity of the region.

Are you considering establishing your business in Hong Kong to take advantage of these incentives? If you seek further information on setting up a Hong Kong business, please leave a message at BBCIncorp team is here to provide dedicated guidance and support.

Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.

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