Eligibility for businesses

Eligibility criteria

For your firm to be eligible for Market Development funding, it must meet all the following nine criteria to the satisfaction of New Zealand Trade and Enterprise (NZTE):

1. Your firm must have turnover of $50 million or less each year (including GST)
2. Your firm must be registered for GST
   Your firm must have a valid GST number issued by New Zealand’s Inland Revenue Department (IRD).
3. Your firm must be resident in New Zealand
   The definition of “resident in New Zealand” varies depending on the type of firm you have.
• Limited liability company: If your firm is a limited liability company, it must be registered with IRD for income tax.
• Sole trader: If you are a sole trader, you must be a New Zealand citizen or permanent resident.
• Partnership, trust, or cooperative: If your firm is a partnership, trust, or cooperative, a majority of its partners, trustees, or cooperative members must be New Zealand citizens or permanent residents.
4. Your firm must conduct its business in a manner consistent with laws and regulations
   The products or services your firm is marketing offshore must comply with laws and regulations in both New Zealand and the offshore countries you are marketing the products or services in.
5. Your firm must have a costed plan for its market development activities
   You must be able to provide a plan explaining what activities your firm would spend Market Development funding on. The costed plan is not a full business plan, but is a project budget for the activities and costs you are seeking support for.
    
   You can supply a business plan if you wish, to help show how the activities in your costed plan are eligible for the programme.
6. Your firm must have a minimum of $40,000 of eligible costs in its costed plan
   The minimum amount of $40,000 is the total amount of the eligible costs, of which the Market Development programme can reimburse up to $20,000.
7. Your firm must operate in a commercial environment
   For your firm to be operating in a “commercial environment”, either:
• your firm must have a product or service that is in market-ready condition at the time you apply for the Market Development fund. This means your firm should already be conducting, or is planning to conduct, taxable activities as defined by IRD.
  
  or:
  
  
• your firm must exist only to conduct market development activities to promote another specific firm’s (or more than one firm’s) brand(s) and/or product(s).
• That other firm or firms must be conducting taxable activities, and you must be able to prove that the commercial benefit of your market development activities can be directly tied only to that firm or firms.
• For example, a marketing firm created to promote a specific group of fruit growers under one brand name is eligible, but a consultancy firm that promotes any firm on a contract basis is ineligible
8. Your firm must be financially viable
   You must be able to demonstrate that your firm can fund the full cost of its costed plan as well as funding its normal operating costs. This ensures that the firm can carry out its plan and still remain in business.
   To demonstrate that your firm is financially viable, it is not enough just to provide growth projections for cash-flow and/or profit. You need to be able to support these projections with either:
• at least 2 years of financial evidence to show the projections are reasonable
  
  or:
• secured orders/sales or documented evidence of a source of investment that is available during the time the marketing activities take place.
9. Your firm must have a commitment to retain value in New Zealand
   Your firm must cause income or investment to accrue to the New Zealand economy (this is called ‘value’). It must also be likely that this ‘value’ will remain in New Zealand in the foreseeable future.
   The main factors that can cause value to accrue to the New Zealand economy are:
• having staff and operations in New Zealand
• holding intellectual property or expertise in New Zealand
• having financial flows into New Zealand.

Eligibility for groups and related companies

If your business is part of a larger group structure, for example one of a group of companies, there are additional eligibility criteria for Market Development funding.

To be eligible for Market Development funding, the total turnover for your business and others in its group needs to be less than $50 million. However if the entire group income exceeds this amount, you may still be eligible.

In some instances, a group of related businesses that together come under the turnover cap of $50 million may be approved under one funding contract and treated as one applicant. For example, this could include three companies all owned by the same directors who take on different aspects of the product delivery.

We will review the information provided and the results of background checks to determine whether your business is eligible.

You must disclose all group relationships in your application – withholding this information may result in your application being declined even if your business is otherwise eligible.

The types of relationships include:

• Subsidiary/child – your business owns another business.
• Parent – your business belongs to another business.
• Sister – other businesses owned by the same business that owns yours.
• Joint venture (JV) – your business and another business both own a subsidiary that is jointly managed and operated by the owners.
• Holding company – your business’s parent company owns other firms but does not itself trade.
• Franchisee and licensee – your business has purchased the rights to operate an independent business using the product, service, or brand of another firm (called the franchisor/licensor), or your business is a franchisor or licensor.

NZTE makes the final decision on eligibility

Even if you think your business and activities are eligible for the programme, it is up to NZTE to make the final decision on whether you are eligible. We judge your eligibility on many criteria, some of which are quite complex. If both your business and its activities are eligible, we will assess your application.

If you have any questions about eligibility

If you’re not sure whether you are eligible for the programme, or if you have any other questions, please call NZTE on 0800 555 888, email us, or contact your client manager (if you have one) for more help.