ICV Certification stands for In-Country Value Certification. It’s a program implemented in the United Arab Emirates, particularly in Abu Dhabi by the Abu Dhabi National Oil Company (ADNOC), to encourage companies operating in the oil and gas sector to maximize their contributions to the UAE’s economy.
Essentially, ICV Certification measures the extent to which a company’s activities create value within the UAE. This includes factors like:
- Local procurement: How much of the company’s goods and services are sourced from within the UAE?
- Local investment: How much does the company invest in UAE-based projects and infrastructure?
- Skilled workforce: How many local citizens are employed by the company, in particular in high-skilled positions?
- Technology transfer: Does the company share its knowledge and technology with local partners?
Companies with higher ICV scores are considered more desirable partners for ADNOC and other government entities in the UAE. They potentially gain benefits like:
- Preferential treatment in contract awards: ICV-certified companies have a higher chance of winning government contracts.
- Access to funding and resources: The government may offer financial incentives and support to ICV-certified companies.
- Improved reputation and market access: Being ICV-certified demonstrates a commitment to the UAE’s economic development, enhancing a company’s image and potentially opening doors to new business opportunities.
Overall, ICV Certification is a win-win situation. It promotes the growth of the UAE’s economy while providing benefits to companies that actively contribute to it.
ICV offers suppliers and vendors a previously unheard-of competitive advantage in the bidding market. By adopting the ICV certification, the Ministry of Industry and Advanced Technology (MoAIT) principally hopes to accomplish the objectives listed below.
- Localization and growth
- An increase in international investments
- employment possibilities are created
- Increase GDP
- becoming a centre for research and development
- Increase the pirate industry’s contribution to the GDP.
Who needs a certificate from ICV?
Participating organisations including ADNOC, Etisalat, Aldar, and Emirates Steel take ICV-certified businesses into consideration when putting up various tenders in the market for domestic and foreign service providers and manufacturers. Suppliers and vendors have an upper hand in the tender process by obtaining the ICV score and certificate. Tier two and tier three suppliers are able to compete with tier one suppliers because the ICV score computation is based on a percentage. Small and medium-sized businesses from the mainland and free zones are equally permitted to participate in the bidding procedure as larger businesses.
How can I become ICV Certified?
The ICV Certificate is valid for 14 months following the most recent audited financial statements. Companies must submit their most recent set of audited financial statements in order to renew their ICV certification. The prerequisites for obtaining an ICV certification for your business are listed below.
no more than two years’ worth of audited financial statements. If the business is already established, it can submit an application for ICV certification using its ten-month management accounting financial statements. The financial statements must be filed in IFRS format and must have been audited by an auditor licenced by the Ministry of Economy.
It is advised to present the financials using accounting codes like UAE Nationals Payroll Costs, UAE Investments Cost, or Local Hires Cost that particularly display the ICV indicators.
Fill out the ICV template for certification or the ICV template. The most recent audited financial statements of the applicant company must be used to support every data submitted to the ICV template. The issuance of the certificate, a fine, or disbarment may be delayed in the event of any misrepresentation or inaccuracy. Contact Farahat and Co for a free consultation if you have any questions about how to obtain an ICV certification.
Pick a certification organisation. The participating entities have chosen the auditing companies in the UAE known as the empanelled certifying bodies to assess the ICV certification applications and confirm the ICV Score. The certifying body issues the ICV certification if the application successfully completes all rounds of verification.
When the application has been approved by the certifying organisation, the In-Country Value Certification can be obtained in 3 to 15 working days. ICV 2.0 was distributed by ADNOC, but ICV 3.0 is the certification that was granted by the participating entities.
Things to keep in mind when requesting an ICV certification:
Companies with industrial licences will be taken into account as products manufacturers, and the cost of the goods manufactured will be the scoring criterion. Third Party Costs will be one of the factors used to determine the ICV score, and a non-manufacturing company will serve as the service provider. For all types of businesses, the other investment requirements, Emiratization, contributions from expatriates, and Bonuses.
Two ICV certificates will be required by businesses having both categories of relevant activity, one for each manufacturer and one for the services.
As required by the participating entities, businesses must include the ICV certificate with their bid.
Cost of obtaining ICV Certification
The ICV certification is issued by the certifying bodies, and a business may request quotes from the recognised certifying bodies. You must hire UAE Approved Auditors to conduct the audit and certify the financials if you have unaudited financials.
It is crucial to remember that the ICV certifications are provided depending on the firm type and its pertinent activity under the licence. You would require two different ICV certifications for each licence, for instance, if you held an industrial licence in one emirate and were manufacturing there while offering services in another. Similar requirements apply to group entities, including the proper disclosure of each entity’s financial information, including revenues, ICV parameters costs, assets, liabilities, and costs associated with each entity under the combined or group financial statement.
ICV Certificate Consultants
Companies without an ICV accreditation will receive a score of 0 during a tender bidding process. On the other hand, businesses with an ICV certification might increase their weight in the bid evaluation by about 40%. A higher ICV score may be available to your business. A higher ICV evaluation score is more likely for financial statements that have been accurately audited and established the appropriate accounting codes for the ICV criteria. ICV certificate UAE helps businesses discover the important ICV components.
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