Unlock Business Opportunity 2024 Guide to ICV Certification for Suppliers

2024 Guide to ICV Certification for Suppliers

The National In-Country Value (ICV) Program is a UAE government initiative aimed at boosting economic performance and supporting local businesses. The program, launched by the Ministry of Industry and Advanced Technology (MoAIT), focuses on GDP growth, development of UAE nationals, and localization of critical links in the value chain. This blog post will provide a detailed overview of the ICV Certification for suppliers, its benefits, and the process of obtaining the certificate.

Generally Accepted Components:

  • The business must be lawfully registered and operating within the United Arab Emirates.
  • A current and valid trade license is required for the company.
  • At the very least, the company must have been in business for a period of one year.
  • A minimum of fifty percent of the company must be owned at least by UAE nationals.

Certification Procedures for the ICV:

  • It is necessary for the company to submit an application to the MoIAT in order to obtain ICV certification.
  • The Ministry of Internal Affairs and Trade will examine the application and may ask for additional information.
  • If the application is accepted, the Ministry of Internal Affairs and Trade will provide the company with an ICV certificate.
  • For a period of fourteen months, the ICV certificate will be valid.
  • The organization is required to renew its ICV certificate prior to its expiration date.

How to Get an ICV Certification?

To obtain an ICV certificate, companies must follow these steps:

  • Audited Financial Statements: Prepare audited financial statements based on International Financial Reporting Standards (IFRS). The financial statements must be submitted in the IFRS format and audited by a Ministry of Economy licensed auditor.
  • Accounting Codes: Use accounting codes that specifically show the ICV indicators such as UAE Nationals Payroll costs, UAE investments cost, or local hires cost.
  • ICV Certification Template: Complete the ICV certification template or the ICV Template. All the details added in the ICV template must be as per the applicant company’s latest audited financials.
  • Certifying Body: Select a certifying body from the list of authorized entities, such as Crowe Mak, to review the ICV application.

Advantages of Obtaining an ICV Certification:

  • Businesses who possess an ICV certificate have an advantage in the process of tendering because the government of the UAE gives preference to businesses that contribute to the economy of the local community. This results in increased competitiveness in tenders.
  • The ICV accreditation displays a company’s dedication to the United Arab Emirates and its people, which results in an improved brand reputation.
  • Obtaining access to new markets: ICV certification can assist businesses in entering new markets in the United Arab Emirates and throughout the region.

The Importance of ICV certification for suppliers in the UAE

Suppliers in the UAE who want to improve their business, get a competitive advantage, and support the nation’s economic growth and diversification initiatives must obtain ICV certification.

Bidding Advantage

ICV certification gives suppliers up to a 40% advantage in the bid evaluation process for tenders with participating entities like ADNOC, Aldar, and Emirates Steel. Suppliers without ICV certification are considered to have an ICV score of zero.

Access to Opportunities

ICV certification allows suppliers to be recognized as approved vendors and gain priority access to procurement requirements within participating entities, even for non-publicly posted tenders.

Economic Development

The ICV program aims to nurture the growth of local goods and services, improve knowledge transfer, and promote local supplier development. It boosts the private sector’s contribution, diversifies the GDP, and localizes critical supply chain components.

Emiratization and Investment

ICV certification considers factors like employment of UAE nationals (Emiratization), investment, and revenue generated within and outside the UAE. This aligns with the UAE’s strategy to boost the economy through local participation.

Competitive Edge

Obtaining ICV certification and maintaining a high ICV score is crucial for businesses in the UAE to thrive in the competitive market. It offers significant advantages in the bidding process and access to the Ministry of Industry and Advanced Technology (MoIAT) database.

Cost of Obtaining an ICV Certificate in the UAE

The cost of obtaining an ICV (In-Country Value) certificates within the UAE can vary depending on numerous factors, consisting of the scale and nature of the business, the range of felony entities concerned, and any additional offerings required all through the certification technique. Typically, there are costs related to utility processing, evaluation, and issuance of the ICV certificates. These costs are normally mentioned via the certifying authority, including the Abu Dhabi National Oil Company (ADNOC) or the Ministry of Industry and Advanced Technology (MoIAT), and can be subject to change over the years. It’s really useful for organizations to immediately inquire with the relevant certifying authority or seek advice from respectable tips for the most correct and up-to-date facts on the cost of acquiring an ICV certificates inside the UAE.

The Consequences of Not Having an ICV Certificate for Suppliers in the UAE

The main consequences for suppliers in the UAE of not having an ICV (In-Country Value) certificate are:

  • Inability to Bid on ADNOC Contracts: Major entities like ADNOC (Abu Dhabi National Oil Company) and its group companies require suppliers to have an ICV certification to be eligible for tendering. Without the certificate, suppliers cannot participate in ADNOC’s bidding process.
  • Damage to Reputation: Not having the ICV certificate can negatively impact a supplier’s reputation, especially when dealing with government entities and major corporations in the UAE that prioritize ICV.
  • Missed Business Opportunities: The lack of an ICV certificate can lead to suppliers missing out on business opportunities with entities that have adopted the ICV program, such as the Department of Economic Development, ADDED (Abu Dhabi Department of Economic Development), and Mubadala Development Company.
  • Potential Penalties: While the search results do not provide specifics, it is mentioned that there are “possibilities for potential penalties” for companies that fail to obtain the ICV certification in the UAE.

The main consequences revolve around the inability to participate in tenders, damage to the supplier’s reputation, loss of business opportunities, and potential penalties for non-compliance with the ICV program requirements in the UAE.

How can KGRN benefit you?

In the UAE, getting an ICV certification is a difficult process that needs help from a professional. Suppliers need to meet a lot of conditions, such as having their financial accounts audited and using the template that MoIAT suggests for supplier submissions. The template must be filled out based on the most recent financial records that have been audited. KGRN and other top ICV certification service providers in Dubai can help sellers meet these important needs.

KGRN has a group of skilled auditors and accountants who can help companies with the Template submission rules. We’ll help you through the whole process and get you an ICV license. The services we offer will be the best in the UAE. These will include ICV certification services as well as other services in the same line.

KGRN can also help companies understand what factors affect their ICV score and make sure their financial records are correct. Aside from auditing and tax services, we also offer accounting and financial services, ICV certification services, and a lot more. Get in touch with us right away to talk about our services and how they can help your business grow.

FAQs and Answers for UAE ICV Certification for Suppliers

How long is the ICV certificate valid for?

The ICV certificate is valid for 14 months from the date of issuance of audited financial statements. Suppliers can get recertified during the validity of the ICV certificate if they choose to, but the validity of 14 months from the first issue will remain.

Is ICV certification mandatory for participating in government tenders and related activities?

ICV certification is optional for those seeking to participate in federal government tenders. The ICV score will be calculated as zero if the supplier does not provide an ICV certificate.

What is the impact of the ICV program being adopted at the national level?

The adoption of the ICV program at the national level has a significant impact on large organizations, public and private companies across different Emirates. As more participating entities adopt the ICV program, the requirements for having an ICV certificate increase to maintain competitiveness while supplying to these large organizations.

Do suppliers need to obtain an ICV certificate even if they are not supplying goods/services directly to Tier I suppliers?

To maintain a competitive edge, Tier II and downstream suppliers are also required to obtain and improve their ICV scores to maintain competitiveness and be considered by Tier I suppliers who are supplying goods/services directly to participating entities

Add a Comment

Your email address will not be published. Required fields are marked *