A five-person trading company in Kwun Tong spends roughly 15 hours a week on supplier follow-ups, customs document chasing, and manual invoice matching. The founder knows AI automation could cut that in half. What she doesn't know is that the Hong Kong government will help pay for it.
The Dedicated Fund on Branding, Upgrading and Domestic Sales — better known as the BUD Fund — has been around since 2012, mostly used by SMEs to attend trade fairs and upgrade packaging. But the 2025–26 Budget changed the game. The government injected an additional HK$200 million into the fund and raised the per-company AI adoption subsidy cap to HK$150,000. For the first time, there's a dedicated carve-out that makes deploying an AI agent a fundable line item.
Here's what you actually need to know.
What the BUD Fund Covers
The BUD Fund reimburses Hong Kong-registered SMEs for projects that improve competitiveness. Historically, "upgrading" meant new machinery, ISO certifications, or e-commerce platforms. The expanded scope now explicitly includes AI-related technology adoption.
That means an AI agent deployment — the kind that handles email triage, client follow-up, document retrieval, or appointment scheduling — falls squarely within the eligible project types, provided you can demonstrate a clear business improvement outcome.
The fund operates on a reimbursement basis. You spend first, claim later. The government covers up to the approved amount, and the new AI-specific cap sits at HK$150,000 per enterprise. That won't fund a full enterprise transformation, but it's more than enough to deploy a private AI agent, integrate it with your existing tools, and run it for a year.
Who's Eligible
The eligibility criteria are straightforward but strict:
- Registered in Hong Kong. Your company must hold a valid Business Registration Certificate.
- Substantive business operations. Shell companies and dormant entities don't qualify. You need real employees, real clients, real revenue.
- Not a listed company. The fund targets SMEs, not corporations.
- Not previously exhausted your BUD allocation. The cumulative cap across all BUD projects is HK$7 million per enterprise (across all programme areas), but the AI-specific component has its own HK$150,000 ceiling.
One detail that catches people: sole proprietors are eligible. If you're a one-person consultancy or freelance broker with a BR, you can apply.
What Qualifies as a Fundable AI Project
This is where most applicants either over-complicate things or under-scope. The BUD Fund secretariat evaluates based on whether the project clearly upgrades your business operations. For an AI agent deployment, that means you need to show:
A defined operational problem. "We want AI" is not a project. "We spend 12 hours/week manually sorting supplier emails and this agent will automate triage and response drafting" is a project.
Measurable improvement. Time saved, error reduction, faster client response. Quantify it. Even reasonable estimates work — the secretariat isn't expecting academic rigour, but they want to see you've thought it through.
A clear implementation plan. Who builds it, what's the timeline, what tools are involved. A managed deployment through a provider like Agent88 counts — you're essentially procuring a technology upgrade service.
Costs that map to the project. Setup fees, integration work, subscription costs for the deployment period, and training. Hardware purchases for on-premise deployment may also qualify if justified.
What doesn't fly: vague "digital transformation" proposals with no specifics, projects that are really just buying a SaaS subscription with no integration or customisation, or anything that looks like business-as-usual spending rebranded as innovation.
How to Actually Apply
The application process runs through the BUD Fund secretariat at the Hong Kong Productivity Council (HKPC). Here's the real sequence:
Step 1 — Check your eligibility. Use the SME Link portal (smelink.gov.hk) to confirm your company hasn't exhausted its allocation.
Step 2 — Scope your project. Write a one-page summary: what problem you're solving, what the AI agent will do, expected outcomes, timeline (most projects run 12–18 months), and budget breakdown.
Step 3 — Get a quote. You'll need a formal quotation from your implementation partner. If you're working with Agent88, we provide a detailed scope document that maps directly to what the secretariat expects.
Step 4 — Submit online. Applications go through the BUD Fund online portal. The form is thorough but not unreasonable — expect company information, project details, budget, and supporting documents (BR copy, financial statements, quotation).
Step 5 — Wait. Processing takes roughly 8–12 weeks. The secretariat may come back with clarification questions. Respond promptly — delays in replies are the most common reason applications stall.
Step 6 — Implement and claim. Once approved, you implement the project, keep all receipts and records, then submit a completion report with proof of expenditure for reimbursement.
The new measures apply to applications received from 14 March 2025 onwards, so this window is already open.
The Non-Obvious Catch
Here's what most guides won't tell you: the BUD Fund reimburses, it doesn't pre-fund. That means you need working capital to cover the project costs upfront. For a HK$150,000 AI deployment, that's manageable for most operating businesses. But if cash flow is tight, factor in that the reimbursement arrives after project completion and review — potentially 6 months after you start spending.
The practical workaround: phase your project. Start with a smaller initial deployment (say, HK$50,000 for core setup and integration), claim that, then expand. The fund allows multiple claims within an approved project.
Also worth noting — the BUD Fund is first-come, first-served within each funding cycle. The additional HK$200 million injection is substantial, but previous rounds have seen strong uptake. Earlier applications face less competition for approval.
What a Typical AI Agent Project Looks Like Under BUD
For a Hong Kong SME — say a 10-person insurance brokerage in Wan Chai or a small logistics operator in Tsuen Wan — a BUD-funded AI agent project typically covers:
- Private AI agent deployment on secure infrastructure (not a shared chatbot — a dedicated agent connected to your email, calendar, and document systems)
- Integration with existing tools — Outlook, WhatsApp Business, your CRM or spreadsheet-based client tracker
- Workflow automation — email triage, follow-up scheduling, document retrieval, client communication drafts
- Training and onboarding — making sure your team actually uses it
- 12 months of managed operation — monitoring, adjustments, support
Total cost for a setup like this typically runs HK$80,000–150,000, which sits neatly within the new AI subsidy cap.
The Bottom Line
The BUD Fund's AI expansion isn't theoretical — it's live, funded, and accepting applications now. If you run a Hong Kong SME and you've been putting off automation because of cost, this removes the excuse. HK$150,000 in government reimbursement covers a full private AI agent deployment.
The companies that move first will benefit most — both from the funding availability and from the operational advantage of automating before their competitors do.
If you want to see what a BUD-eligible AI agent deployment looks like for your business, get in touch at agent88.hk. We'll scope it, quote it, and help you put together an application that actually gets approved.