How can Web3 enterprises obtain a subsidy of 1.3 million Hong Kong dollars from Hong Kong Cyberport?

Obtaining a 1.3 Million HKD Subsidy from Hong Kong Cyberport A Guide for Web3 Enterprises

Author: Techub News

With just one idea, Ivan, a local Web3 entrepreneur from Hong Kong born in the 1980s, received a subsidy of 100,000 Hong Kong dollars from the Hong Kong government, and there are still millions of Hong Kong dollars in subsidies waiting for him.

All of this is thanks to the support of the Hong Kong government for entrepreneurship in the Web3 field. Cyberport is responsible for directly supporting startups. In January 2023, Hong Kong established the “Cyberport Web3 Base” and announced a budget of 50 million Hong Kong dollars to accelerate the development of the Web3 ecosystem.

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On Father’s Day, June 18th, Hong Kong Financial Secretary Paul Chan Mo-po wrote that since the establishment of the “Cyberport Web3 Base,” there have been nearly 180 Web3 companies residing in Cyberport.

If you want to establish a Web3 company and successfully settle in Cyberport to receive over a million Hong Kong dollars in subsidies, how should you do it? Techub News will provide you with a guide.

Cyberport Million Dollar Subsidy Regulations

In September 2022, Ivan had an idea of integrating AI+web3+fitness dance social platform, allowing users to dance fitness and share videos on any AI-recognized device while earning rewards.

The following month, the Hong Kong SAR Government announced a declaration on virtual assets.

Ivan began to sort out his entrepreneurial ideas. He immediately applied for the CCMF (Creative Micro Fund) incubation program on the Cyberport official website.

In January 2023, Hong Kong established the “Cyberport Web3 Base” and announced a budget of 50 million Hong Kong dollars to accelerate the development of the Web3 ecosystem.

In February, Ivan’s project DanceFit received an interview notice. Out of over 100 applications, about 40 projects were selected for the interview stage, and around 10 projects passed the interview.

“I looked at the list and there’s one including me under the web3 category. Most of the others are from other technology fields. The teams come from Europe, the United States, Korea, Japan, etc., but 30% of them are Chinese teams,” Ivan told Techub News.

Ivan revealed that he received a subsidy of 10,000 Hong Kong dollars as soon as he passed the initial round of interviews.

Cyberport is managed by Hong Kong Cyberport Management Company Limited, which is wholly owned by the Hong Kong Special Administrative Region Government. It is committed to nurturing technology talents and supporting startups, creating an ecosystem for innovation and technology. Since its completion in 2004, it has gathered 1,900 startups and technology companies, including many unicorns such as Klook and Animoca Brands, as well as GOGOX, which is already listed in Hong Kong.

Ivan told Techub News that in February and March this year, many entrepreneurs came to him to inquire about how to apply for funding from Cyberport when everyone started discussing Hong Kong policies.

“Each company can apply for up to HK$1.3 million without giving up equity, which is essentially free funding.” Linda, who specializes in providing consulting services for Cyberport applications, told Techub News that there are two types of funding programs for start-ups: CCMF (Creative Micro Fund) and CIP (Incubation Program).

The requirements for CCMF are relatively low, as long as there is an idea related to the Web3 field, you can apply, and the funding can reach HK$100,000. The incubation period is six months, with interviews every three months. If the interview is successful, funding can be obtained in stages. The first stage is HK$10,000, the second stage is HK$45,000, and the third stage is HK$45,000.

Ivan told Techub News that his project has already received the full HK$100,000 in funding support.

However, for non-Hong Kong residents, the process is not so smooth. For example, during the funding disbursement process, you must have a Hong Kong bank account in order to receive the funds successfully. If you miss the incubation period, the funding will no longer be disbursed.

“If you don’t have a Hong Kong residency, you need to have an office in Hong Kong in order to open an account, which means the minimum cost for opening an account is to apply for a workspace at Cyberport, which costs HK$1,780 per month.” Linda told Techub News.

“Cyberport will have dedicated personnel to help you with tasks like opening an account.” Linda explained.

Since the CCMF program mainly targets young entrepreneurs in the early stages of development, applicants must be between 18 and 30 years old. If applying as an individual, you must have a Hong Kong residency. If applying as a company, team members must be between 18 and 30 years old.

In contrast, the application threshold for CIP is higher.

“CIP expects you to have a clear product business that can be progressed, or at least have a product launched within 12 months after successful application, and a market promotion plan of 12 to 18 months.” Linda told Techub News.

Therefore, newly established projects can first apply for CCMF and then apply for CIP if selected.

The requirements for applying for CIP include:

1. The applying entity must be a registered company in Hong Kong;

2. The project must have been established less than 7 years before the application;

3. The applicant must hold more than 51% of the company’s equity, or obtain shareholder authorization if not;

4. For approved applicants, at least one team member needs to be stationed in Hong Kong for 1 year, but there is no need to work at Cyberport.

According to the experience of Visman Notes editor Liu Yaying, if you settle in the Digital Harbor, there will be a 30% attendance requirement, calculated based on the punch-in and punch-out records. It doesn’t require you to sit in the office all day, you can leave after punching in, but it’s not clear whether the 30% attendance requirement is per week or per year.

“So you can see that there are many vacant seats in the Digital Harbor office, but in fact, they have all been rented out,” said Liu Yaying.

Entrepreneurs applying for the CIP can receive a maximum of HKD 500,000, with a incubation period of two years, distributed in four stages.

If the application is approved, you can receive HKD 100,000. If you pass the first round of interviews, you can receive HKD 50,000; if you pass the second round of interviews, you can receive another HKD 50,000; if you pass the third and fourth rounds of interviews, you can receive HKD 100,000 in a lump sum. There are 6 months for each round of preparation time.

In addition, if the applying company obtains trophies or rewards from other competitions during the incubation period, they will receive an additional HKD 200,000 in funding after completing the four rounds of interviews.

Furthermore, after completing six months or two years of incubation, entrepreneurs will become graduates. Projects that have graduated within 5 years can also apply for CASP (Cyberport Acceleration Support Program), which specifically helps projects explore international markets, and the funding can reach HKD 300,000.

In addition, there is also a support program called MDSS that supports the development of the mainland market, with funding up to HKD 200,000.

If a project participates in multiple acceleration programs at the Digital Harbor, they can also apply for a funding program that provides HKD 200,000.

Therefore, if a project successfully completes all applications, it can receive a maximum subsidy of HKD 1.3 million.

In April, Kong Jianping, Director of the Hong Kong Cyberport, said: “We have just evaluated a group of projects at the Digital Harbor. There are about a dozen Web3 projects that can receive HKD 500,000 in incubation funding.”

On May 24th, hardware wallet OneKey announced that it had received HKD 500,000 in funding from the Hong Kong Cyberport and obtained office space provided by the Digital Harbor.

Company Talent Subsidy Program

The Hong Kong Technology Talent Immigration Scheme refers to bringing qualified companies to import overseas and Mainland technology talents to engage in R&D work in Hong Kong. After the company’s application is granted a quota, it can apply for work visas for technology talents within the 24-month validity period.

Linda told Techub News that the threshold for enterprises settling in the Digital Harbor applying for the talent introduction program will be lowered significantly. This can help companies recruit foreign employees and facilitate the processing of work visas or Hong Kong identity for them.

In addition, companies approved for the technology talent immigration program can also continue to apply for the “Research Talent Pool” funding program. This program aims to fund the nurturing companies and tenants of Hong Kong Science Park and the Hong Kong Cyberport to hire research talents for R&D work.

For example, it will provide funding for company researchers for 36 months, with a monthly allowance of HKD 18,000 for bachelor’s degree holders, HKD 21,000 for master’s degree holders, and HKD 32,000 for doctoral degree holders.

“If companies that apply for the CIP program want to apply for talent subsidies, it will be relatively easier because the companies that have gone through the CIP program already meet the requirements for talent subsidies,” said Linda.

He believes that talent in Hong Kong comes at a high price, and the subsidies can only help alleviate some of the burden for companies, but may not cover the full cost, making it unlikely to make money solely through subsidies.

“For example, theoretically speaking, a company that hires 4 doctoral degree holders can receive subsidies of about HKD 1.53 million per year, or about HKD 4.6 million over three years. However, you need to understand that the cost of 4 doctoral degree holders in Hong Kong may be more than HKD 32,000 per month.”

Tips:

1. Fill out the application form in English and choose English for presentations to increase the chances of being selected.

2. Include contact information such as email and phone number on the application form to ensure smooth communication.

3. Ideally, the applicant and the person signing the contract should be the same.

4. For companies applying for the CIP program, at least one team member should hold a Hong Kong work visa.

5. Currently, the waiting period for review is 4 months, but it will be shortened next year.

6. The presentation time is only 6 minutes, so focus on the important parts.

Cyberport Ecosystem

Paul Chan, Co-Chairman of the Fintech Association of Hong Kong and judge at Cyberport, shared his evaluation criteria for Web3 startup projects: First, innovation accounts for 30%, considering whether there are too many similar projects at present; second, applicability accounts for 30%, whether the project can bring value to Hong Kong and not just be speculative; third, self-drive of the project accounts for 30%, whether the team has been running stably for some time; and finally, social responsibility accounts for 10%, whether the project has a sense of social responsibility.

Paul Chan said that Web3 entrepreneurship in Hong Kong will not be affected by mainland policies, and Hong Kong’s progress towards becoming a global virtual asset innovation center is a long-term plan.

Alan Yan, Director of Fintech at Cyberport, believes that the resources and ecosystem of Cyberport will be very helpful for their future development. At the same time, these relatively mature companies will also provide a lot of assistance to younger entrepreneurs and even directly invest in promising projects. For example, Animoca Brands has already invested in more than 300 Web3 projects. This forms an industry ecosystem with intrinsic motivation.

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