Australian products and services have an aura in certain markets. A combination of the Australia brand and recent entrepreneurship has seen businesses break into the Asia-Pacific and beyond. And such success is going well beyond traditionally well-marketed products such as wine, beef, and dairy products. Innovation, R&D, and well-placed investment has taken a number of small businesses up into the heady realms of global success.
Combine this with the Australian FTAs (free trade agreements) made with countries such as China, Malaysia, and the US, the cross-border trade promoted by ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), and the boost given by the Export Market Development Grant, and we would argue that 2019 is a good year to leap beyond Australia’s borders with your products or services. From Korea and Vietnam to China, Singapore and beyond, there are attractive markets waiting for new brands.
Austrade highlights some of these recent export success stories. Freelancer.com might not be the first company that comes to mind when you think of exporting. The company has helped hundreds of Australian businesses find freelance labour overseas. But, as the largest single freelancing marketplace in the world, this Australian company has focused on an online marketplace that is dedicated to depth and breadth. It has skilled persons from all over the world offering their skills on a feature packed platform. As such, many Australians have been able to export their skill-set overseas without leaving the country.
As freelancing and crowdsourcing break the bonds of traditional office-based work spaces and practices, Freelancer has led the way. Austrade has assisted the company by providing it with the Export Market Development Grant seven times, while also assisting with networking events and introductions to potential overseas service providers. This has allowed the company to set up offices in Buenos Aires, San Francisco, Vancouver, Manila, London, Sydney, and Jakarta with a workforce of about 520 employees.
Likewise, AI (Artificial Intelligence), ML (Machine Learning), operations research and human-centred design firm HIVERY benefitted hugely from Austrade’s support. Focusing on solutions in the retail and FCMG sectors in Australia, the company had built strong and reputed IP (intellectual property) through its data support of The Coca-Cola Company. It was then time to expand. The EMDG reduced the risks of investing in sales and marketing in Japan and the USA, so much so that the bulk of its revenue now comes from abroad.
Family-owned Redback Boots has been selling shoes and boots since 1927 using a very streamlined business model. The focus has been on factory workers over admin staff. Still, the small business was able to generate revenue of nearly $40 million. Time came to explore fresh options. Again, the Export Market Development Grant was integral, helping the company utilize the right claim categories with plans for expanded use in the future. It hopes now to push its international presence and develop more technologically mature operations.
The EMDG is not the only thing you need to succeed overseas. In much the same manner as investment is not the be-all and end-all of business success, you also need the right advice from experienced strategists and CFO-level experts.
In fact, you’ll want export advisors who can work with you from the very beginning to help you access the grant in the first place.
The Export Market Development Grant (EMDG) scheme, delivered by Austrade, supports a wide range of industries.
It helps small- and medium-sized Australian businesses to develop export markets. It reimburses up to 50 per cent of eligible export promotion expenses above $5,000 provided that the total expenses are at least $15,000. You can access up to eight grants.
You apply for each grant within a grant year. A grant year is the financial year (July to June) in which the dates of the expenses being claimed actually occurred. Expenses incurred in a grant year must be claimed as part of the EMDG application submitted in the financial year immediately following (except your first application, which can include expenses from the two financial years immediately prior to application).
To qualify for an EMDG grant, your business must have promoted one of the following:
One of the key reasons you should consider an advisor when applying for the grant is that there are two ways of receiving the grant after your first two claims. For your third claim and those following, you must demonstrate how you meet one of two performance measures, either Option A or Option B. Option A involves an export performance test. Subject to a maximum grant of $150,000, your grant amount will be a percentage of your export earnings ranging between 5% and 40%, depending on how many grants you have received previously. Under Option B, you must meet the Australian Net Benefit requirements. If you meet these requirements, which evaluate the financial and economic returns of your business endeavours, then your grant amount will be worked out in relation to your eligible export expenses, subject to the maximum grant amount and available funds. Since there is a strong incentive for businesses to continue to receive this grant money over numerous years, it is worthwhile working with an expert who can help you navigate these performance measures.
It is easy to dismiss the expansion of your small business into foreign markets as a mere daydream. But is it too good to be true? The reality of recent successes and the great financial and operational support of the EMDG begs to differ. With the right advice and experienced direction, 2019 could be the year you not only avoid tax scams, but burst into an overseas market.
2019 may also very well be a year of economic shifts, and this may lead to shifts in your market and business needs. The local market may not seem as vital as certain foreign markets. As such, you and your team need to be more adaptable than you were in 2018. The best way to do so is to arm yourself with the right advice. In regards to securing an expansion into a foreign market, your management team can greatly benefit from the direction of expert business advisors or the cost-effective choice of hiring a virtual CFO.
Calibre Business Advisory has a unique team that combines personal dedication from experienced tax accountants to each and every client with an Asia-wide reach. This puts the firm in a rare position when it comes to helping you with Austrade export grants, R&D audits, doing business in Korea and other foreign markets, and compliance and tax audit advice.
Contact one of our advisors for advice on how to strengthen your business outlook in 2019.
Important Disclaimer: Readers should not act solely on the basis of the material on this page. Items herein are general comments only and do not constitute or convey advice. Legislation and proposals of legislation are also subject to constant change. We therefore recommend that formal advice be sought before acting in any of the areas. This news article is issued as a guide to the readers. Calibre Business Advisory Pty Ltd and its associated entities disclaims any losses that may be incurred as a result of the reader undertaking any action based on this article.
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