Monthly Archives: January 2025

The UAE’s In-Country Value (ICV) initiative is critical for fostering local economic growth, Emiratisation, and industrial development. Obtaining the ICV certificate, which acts as documentation of a company’s contribution to the UAE economy, is an essential component of this program. Understanding the validity duration of the ICV certificate is critical for businesses to ensure compliance and competitiveness in government and semi-government contracts.

This blog provides a thorough summary of the ICV certificate’s validity, renewal process, and advice for remaining compliant.

What Is The ICV Certificate?

The ICV certificate is an official certification issued by a certifying authority approved by the UAE Ministry of Industry and Advanced Technology (MOIAT). It assesses a company’s contribution to the UAE economy using particular criteria such as local procurement, Emiratisation, investments, and exports.

The ICV certificate is necessary for enterprises bidding on contracts with government bodies and significant corporations that participate in the ICV program, such as ADNOC, Etisalat, and Mubadala. A certified certificate increases a company’s chances of getting contracts and displays its commitment to the UAE’s economic aims.

Validity Period of the ICV Certificate

The ICV certificate is valid for 14 months from the date of issue. This prolonged validity term guarantees that firms have enough time to use their certifications for tenders and contracts without having to renew them frequently.

Key Points to Consider About the Validity Period

Single-Year Financial Basis: The certificate is based on the company’s audited financial statements from the most recent fiscal year.

Renewal Timing: Although valid for 14 months, businesses are recommended to begin the renewal procedure well in advance to avoid lapses.

Continuous Tenders: A valid ICV certificate is required for participation in tenders with companies that need ICV compliance.

Why is the Validity Period 14 Months?

The 14-month validity period aims to balance the following:

Business Flexibility: During this period, enterprises can engage in tenders and contracts without the necessity for quick re-certification.

Alignment with Financial Reporting: Because the certificate is based on audited financial accounts, its validity extends somewhat beyond one fiscal year to account for differences in financial reporting timeframes.

Encourage Regular Updates: The validity period guarantees that organisations update their financial data on a regular basis, keeping the ICV program current and relevant.

What happens when the certificate expires?

Once the ICV certificate has expired, it cannot be used to submit tenders or establish compliance with ICV criteria. Businesses must renew their certification to continue working on government and semi-government projects.

Consequences of an Expired Certificate: Tender Ineligibility – Expired certificates prevent organisations from competing on ICV-compliant projects.

Missed Opportunities: Without a legitimate certificate, organisations risk losing out on valuable projects and contracts.

Reputation Impact: Having a valid certificate demonstrates a company’s dedication to the UAE’s economic aims. An expired certificate can indicate noncompliance.

How Do I Renew the ICV Certificate?

Renewing the ICV certificate is a simple process that requires updating financial information and submitting it for re-certification. Here’s a step-by-step instructions:

1. Prepare Updated Financial Statements

Ensure that your company’s audited financial accounts for the most recent fiscal year are prepared. These materials provide the foundation for calculating the ICV score.

2. Select an Approved Certifying Body

Submit your financial statements to a certifying organisation approved by the MoIAT. Select a reputable and experienced certifying authority to ensure a seamless process.

3. Calculate the new ICV Score

The certifying authority will analyse your financial information and determine your revised ICV score based on the most recent fiscal year’s contributions.

4. Receive the New Certificate

Once the certifying agency has verified your information, they will issue a reissued ICV certificate valid for the next 14 months.

Tips for Keeping a Valid ICV Certificate

To ensure continuous participation in ICV-compliant tenders, organisations should implement the following practices:

1. Keep Track of Expiration Dates

Keep track of your certificate’s expiration date and start the renewal process at least 1-2 months in advance.

2. Keep Accurate Financial Records

Regularly update and examine your financial statements to ensure they are ready for submission at renewal time.

3. Work with ICV Consultants

Engage ICV advisors who can help you navigate the renewal procedure and improve your score.

4. Align Operations with the ICV Goals

To improve your score and competitiveness, continue to work on enhancing local procurement, Emiratisation, and other ICV characteristics.

Advantages of Renewing the ICV Certificate On Time

Renewing your ICV certificate before it expires provides the following benefits:

Continuous Eligibility for Tenders

A valid certificate enables easy participation in government and semi-government tenders.

Enhanced Business Reputation

Timely renewal indicates your dedication to the UAE’s economic growth objectives.

Improved Scoring Opportunities

Updating financial data during renewal can result in improvements in your ICV score, offering you a competitive advantage.

Operational Stability

Maintaining a valid certificate allows for continued business operations and access to lucrative contracts.

Common Challenges to Maintaining Validity

Despite the uncomplicated renewal process, firms may face problems such as:

Delayed Financial Audits: The renewal procedure may be delayed if audited financial statements are prepared late.

Lack of Awareness: Some businesses fail to monitor their certificate’s expiration date, resulting in lapses.

Insufficient Local Contributions: Failure to meet the ICV standards during the renewal term may result in a lower score.

How AbstractICV Can Help

AbstractICV specialises in helping businesses navigate the ICV certification and renewal procedure. With our knowledge, you can ensure timely preparation and submission of financial data, receive personalised suggestions for improving your ICV score, maintain compliance with UAE legislation and maximise tender chances.

Conclusion

The ICV certificate is an important tool for businesses in the UAE since it allows them to contribute to the local economy and receive government contracts. With a 14-month validity period, you must be proactive in renewing your certificate to preserve competitiveness and compliance.

Businesses may assure continuous participation in the ICV program and connect with the UAE’s aim for long-term economic growth by understanding the renewal process and implementing best practices.

Need help with your ICV certification? Contact AbstractICV now for expert advice and support!

How is the ICV score calculated ?

The UAE government’s In-Country Value (ICV) program is a crucial initiative for boosting the local economy by encouraging enterprises to contribute to Emiratisation, local procurement, and economic diversification. The ICV score, which quantifies a company’s contribution to the UAE economy, is a critical component of this program.

Understanding how the ICV score is computed is critical for businesses seeking government and semi-government contracts. This article explains the calculation procedure, the components involved, and how to increase your ICV score.

What Is The ICV Score?

The ICV score is a percentage-based rating given to businesses based on their audited financial accounts. It measures how much value a company creates in the UAE through local spending, employment, investment, and exports.

This score is critical for enterprises competing on contracts with UAE government entities and major corporations like ADNOC, Etisalat, and Mubadala. Higher scores increase a company’s chances of getting contracts, providing a significant competitive advantage.

Factors Affecting ICV Score Calculation

The ICV score is derived using certain criteria established by the Ministry of Industry and Advanced Technology (MoIAT). The criteria include:

1. Local Procurement: Purchasing goods and services from UAE providers.

Impact: A larger percentage of local procurement boosts the ICV score. Businesses are encouraged to prioritise local suppliers over overseas ones.

2. Emiratisation: The percentage of UAE nationals employed by the company.

Impact: Hiring and retaining Emirati employees, particularly in skilled positions, considerably improves the ICV score. Emirati training programs and professional development initiatives are also under consideration.

3. Asset Investment: Capital spent on local infrastructure, equipment, and operational facilities in the UAE.

Impact: Companies that invest in assets such as manufacturing plants, warehouses, and office buildings improve their overall score.

4. Exports: Revenue from non-oil exports originating in the UAE.

Impact: Export activities contribute to the UAE’s economic diversification, and enterprises that export receive a higher ICV score.

5. Definition of Operating Costs in the UAE: The fraction of a company’s operational expenditure assigned to UAE-based resources such as utilities, rent, and local services.

Impact: Increased operational spending within the UAE leads to a higher score.

6. Subcontracting: Hiring UAE-based subcontractors for projects and services.

Impact: Subcontracting with local firms displays a commitment to the UAE economy, which improves the score.

ICV Score Calculation Formula

The ICV score is derived as a proportion of the company’s overall contribution to the UAE economy divided by its total income. 

The formula is: 

ICV Score (%) = (Total Local Contribution ÷ Total Revenue) × 100

Local procurement, Emiratisation, local investments, and exports are all examples of “local contributions.”

Steps for Calculating the ICV Score

Prepare the Audited Financial Statements

Companies must produce audited financial accounts from the most recent fiscal year. These materials form the basis for calculating the ICV score.

Evaluate Local Contributions

Analyse your financial data to determine contributions in the following categories:

• Spending with UAE-based suppliers
• Salaries and benefits are paid to Emirati employees
• Investing in local infrastructure and assets
• Revenue from exports
• Adjust for Non-Qualifying Expenses
• Exclude costs that do not benefit the UAE economy, such as imports and overseas operating expenses

Apply The Formula

Use the ICV calculation to determine your score as a proportion of total revenue

Submit to an Approved Certifying Body

Send your financial information to a MoIAT-approved certifying organisation for validation. The certifying body examines your documentation, validates your calculations, and issues the ICV certificate.

How Can Companies Improve Their ICV Scores?

Achieving a competitive ICV score necessitates strategic and operational changes. Here are some actionable methods to enhance your score:

1. Increase local procurement

Prioritise UAE-based suppliers of goods and services. Develop long-term relationships with local vendors to maintain consistent local spending.

2. Emphasis on Emiratisation

Hire more UAE nationals and support their professional development. Offering competitive salary packages and opportunities for advancement might help increase retention rates.

3. Invest in Local Assets

Develop operating facilities in the UAE, including factories, warehouses, and offices. These investments not only boost your score but also display your support for the local economy.

4. Increase Export Activities

Expand your company’s export operations to help the UAE’s non-oil economy. Diversifying your revenue streams through exports will dramatically boost your score.

5. Work with ICV consultants

Work with professionals that can audit your financial data, find areas for improvement, and recommend custom tactics to increase your ICV score.

Common Challenges in ICV Score Calculation

While calculating the ICV score is straightforward, businesses frequently confront problems such as:

Complex Financial Data: Parsing financial statements into ICV-relevant components can be time-consuming.

Limited Local Procurement Options: Some businesses rely significantly on imported items, reducing options for local expenditure.

Low Emiratization Rates: Recruiting and maintaining Emirati employees can be difficult, particularly in specialised areas.

Lack of Awareness: Many firms are unaware of the ICV program’s benefits or how to align their processes to improve their score.

Benefits of a High ICV Score:

Achieving a high ICV score has various benefits, including:

Improved access to government contracts

Companies with higher scores are given preference for bidding from government and semi-government institutions such as ADNOC and Etisalat.

Enhanced reputation

A high ICV score demonstrates your dedication to assisting the UAE economy, which increases your reputation with clients and partners.

Alignment with UAE Vision 2030

A high score indicates your contribution to the UAE’s long-term economic goals, which include diversification and sustainability.

Achieve Competitive Edge

In industries with fierce rivalry, a high ICV score can set your company apart and increase your chances of landing big deals.

The Function of Certifying Bodies in ICV Score Calculation

Approved certifying bodies are critical to assuring the accuracy and reliability of ICV results. 

The Certifying bodies will:

• Review and validate audited financial accounts.
• Comply with MoIAT requirements.
• Issue the ICV certificate, which is valid for 14 months.

Conclusion

The ICV score is an important indicator for businesses operating in the UAE because it shows their contribution to the country’s economic progress. Companies can attain a competitive score and unlock major opportunities in government procurement by understanding the factors that influence its calculation and applying performance-enhancing initiatives.

Whether you want to enhance your score or navigate the certification process, working with a seasoned ICV consultant like AbstractICV can make all the difference.

Do you need help with your ICV score? Contact AbstractICV today for expert advice and personalised solutions.