Frequently Asked Questions (FAQs) About ICV Certification In UAE
Securing an ICV certificate in UAE brings long-term growth for businesses and it’s crucial to stay competitive in the evolving business landscape. We have answered the most commonly asked questions in ICV certification, offering a broad understanding of its core factors and procedures.
What is an ICV Certificate in UAE?
The ICV certificate is an official document issued by a certifying body registered under the UAE Ministry of Industry and Advanced Technology (MOIAT)
What is an In-country Valuation Program?
The In-Country Valuation (ICV) Program has been introduced in the Middle East and this initiative was taken by the Abu Dhabi National Oil Company, also called as ADNOC, the national oil corporation to foster the growth of local economy as well as diversify the economy.
What are the objectives of the ICV program?
The main objective of the ICV program is to redirect larger parts of procurement expenditures of local industries to the national economy and boost the economic performance of the country.
Who is the governing body of the ICV program?
In 2021, the UAE introduced In-country valuation as part of the “Projects of the 50”, under the oversight of the Ministry of Industry and Advanced Technology (MoIAT).
What are the strategic objectives of the ICV Program?
The strategic objectives of ICV program includes:
· Localization of supply chains and the development of new local industries and services
· Stimulating and attracting foreign investments and diversifying the economy
· Creating valuable job opportunities in the private sector
· Increasing exports
· Contributing to the growth of GDP
· Increase the private sector’s contribution to national GDP.
Why Do Businesses Need ICV Certification?
Here are some of the reasons why businesses need ICV Certification:
1. Competitive Edge in Tenders
Businesses that have higher ICV scores will have an increased chance of securing contracts, as government entities give precedence to local contributions.
2. Enhanced Credibility
Having An ICV certificate demonstrates a company’s commitment to boosting the country’s local economy, and improving its reputation among clients and stakeholders.
3. Access to Lucrative Opportunities
With an ICV certificate, businesses can have access to various govt tenders and projects, increasing their revenue potential.
4. Support for National Goals
By aligning with the ICV program, businesses promote the objectives of the UAE such as Emiratisation, economic diversification, and local industrial growth.
Who Needs an ICV Certificate?
The ICV certificate will be required for businesses that:
- Supply Goods or Services to Government Entities
- Work with Semi-Government and Large Corporations
- Aim to Participate in Tenders
- Align with UAE Economic Goals
Is ICV mandatory in the UAE?
No, the ICV certificate is optional and not mandatory in the UAE. Although it is optional, it gives a competitive edge for businesses that apply for tenders and work with government entities such as ADNOC or other public companies. Businesses with no ICV certificate will have a zero ICV score when applying for tenders and contracts.
Who issues an ICV Certificate?
Only MOIAT approved auditors or audit firms will be able to issue the ICV certification in the UAE. You can check the list of ICV certifying bodies in the UAE in the official website of MOIAT.
What is the Eligibility Criteria to Obtain ICV Certification?
Here is the eligibility criteria for businesses to obtain an ICV certificate in the UAE:
- Must have a current trade license.
- Should have a physical office and must conduct business activity within the UAE.
- Must fulfill industry-specific requirements to obtain an ICV certificate.
- Must go through audit by an ICV certifying body authorized by MOIAT.
What is the Validity of an ICV Certificate?
A period of 14 months from the date of issuance of audited financial statements is the validity for an ICV certificate. The expired ICV certification will not be considered while bidding for govt tenders and contracts. Businesses are required to renew their certificate to continue working on government projects.
What are the Benefits of ICV Certification?
Businesses that obtain an ICV Certificate will have a lot of advantages and enjoy more benefits such as:
- Increased Business Opportunities
- Competitive Edge in the UAE Market
- Access to Government Initiatives or Programs
- Support National Development
- Strengthened Local Partnerships
- Long-term Sustainability
- Enhanced Corporate Reputation
How to Get an ICV Certification in UAE?
To obtain an ICV certification in the UAE, the company should contact an ICV certifying body and the auditor will review your documents for issuing your ICV Certification.
Here is the process of obtaining an ICV certificate in the UAE:
Business Registration: Your business needs to be registered with any of the UAE authorities.
Proper Document: Businesses that need ICV certification must gather all necessary documentation, including purchase invoices, financial records, employee details, and contracts.
Assessment: Your business should undergo a comprehensive assessment to determine the ICV score, which is conducted to measure the value generated within the UAE.
ICV Calculation: The ICV score is calculated by taking into account factors such as capital investment, local spending, and employee nationality.
ICV Certificate Issuance: If the company’s ICV score meets the required threshold, you will receive the ICV Certificate.
Compliance and Reporting: Proper maintenance of company records and staying compliant with ICV regulations is necessary to renew the ICV certification and update your ICV score.
How long does it take to obtain the certificate?
The duration of obtaining an ICV certificate depends on various factors including complexity of a business operations and the certification process. In UAE, it typically takes 3 to 15 days for issuance of ICV certification, after verifying your audited financial statements.
How is ICV Score Calculated?
The ICV score is derived as a proportion of the company’s total contribution to the UAE economy divided by its total income.
The formula is:
ICV Score (%) = (Total Local Contribution ÷ Total Revenue) × 100
What are the Factors That Determine ICV Score?
The ICV score is determined using certain factors which includes:
1. Local Procurement: Buying goods and services from UAE providers.
A larger percentage of local procurement increases the ICV score of a business. Businesses that prioritise local suppliers will have a good ICV score.
2. Emiratisation: The percentage of employees hired within the UAE by the company.
Employing Emiratis, notably in skilled positions, will be considered for ICV certification and increases the ICV score.
Emirati training programs and professional development initiatives will also be considered.
3. Asset Investment: Investments on local infrastructure, equipment, and operational facilities in the UAE.
Businesses that invest in assets such as warehouses, manufacturing plants, and office buildings contribute to the overall score improvement.
4. Exports: Revenue from non-oil exports in the UAE.
Export activities contribute to the UAE’s economic diversification, which in turn increases the ICV score.
5. Definition of Operating Costs in the UAE:
The considerable amount of a company’s operational expenditure should be related to local resources such as rent, utilities, and local services.
Impact: Increased operational spending within the UAE leads to a higher score.
6. Subcontracting: Partnering with subcontractors based in the UAE for projects and services.
Subcontracting with a local company showcases its commitment to the UAE economy, which increases the score.
How to find the list of ICV Certifying bodies in the UAE?
The list of ICV certifying bodies will be available on the official website of MOIAT.
How much will the ICV certificate cost?
The cost of ICV certification is determined by following the below criteria and depends on various factors:
- The size of the company (small, medium, and large)
- Number of employees,
- Annual cost and revenue
- Supplier’s nature of the facility – industrial or commercial
