Process of Obtaining ICV Certification in the UAE

Launched in February 2020, the In-Country Value (ICV) Program is an initiative of the Abu Dhabi Department of Economic Development (ADDED). The primary goals of the ICV program are to increase GDP, enhance human resource development, and strengthen UAE enterprises’ technological capacities. Ultimately, these programs aim to support local start-ups, accelerate economic growth, and make UAE enterprises more competitive on the global stage.

Requirements for Acquiring ICV Certification in the UAE

The UAE government has introduced the National In-Country Value (ICV) Certification program to support the local economy, create more job opportunities for Emiratis, and diversify the GDP sources. The program aims to encourage suppliers to increase their contribution to the UAE’s development and enhance their competitiveness in the market.

The ICV certification is a mandatory requirement for suppliers who want to participate in tenders from government and semi-government entities, such as the Abu Dhabi National Oil Company (ADNOC), the Ministry of Industry and Advanced Technology (MoIAT), and others. The ICV certification shows the supplier’s score, which reflects their level of localization and value addition in the UAE.

To obtain the ICV certification, suppliers need to follow certain steps and meet certain conditions, as explained below.

• Only authorized and recognized organizations can issue ICV certifications.
• All information provided in the ICV certificate template must be based on the company’s most recent audited financial statements.
• To be certified with ICV in 2020, companies must provide audited financial statements that are current and compliant with IFRS, and no older than two years after the certification year. Specifically, the audited financial statements must be no more than 18 months old. For newly formed companies (those established less than a decade ago) without audited financial statements, the ICV can be determined using management records covering the first ten months.
• If a management account covers a period of 10 months or more, it can be audited.
• The validity period of the ICV certificate is fourteen months, commencing from the date of the release of the audited financial statements (AFS). During this “valid timeframe,” any company can choose to apply for recertification. However, the original validity will remain.

Process of Obtaining ICV Certification in the UAE

The In-Country Value (ICV) program in the UAE incentivizes companies to contribute to the local economy by sourcing goods, services, and employing Emiratis. Obtaining ICV certification demonstrates your commitment to this initiative and can open doors to lucrative government contracts and tenders. Here’s a step-by-step guide to navigating the process:

Review audited financial accounts: Review the audited financial accounts prepared by a UAE-approved auditor, using IFRS as a guide. As mentioned earlier, management records may be used for newly formed companies.

Register with the ICV certification body: Register with the relevant ICV certification body. Companies cannot switch certifying bodies after engaging one without obtaining the necessary paperwork and clearance from the appropriate authorities.

Complete and submit ICV Template: Fill out and submit the ICV Template to the certifying body. Follow MOIAT’s instructions when completing the form.

Verify financial statements and supporting documents: Ensure the company’s audited financial statements and any supporting documentation align with the figures provided in the ICV Template.

Include net expenditures in ICV Template: Include the company’s total revenue generated throughout the fiscal year as well as the net expenditures incurred in providing goods or services to all clients, including government entities, in the ICV Template.

Express numbers in AED: All figures in the ICV Template must be expressed in AED.

Reclassify stock differentials for consumption: When a company cannot provide consumption specifics (segmentation by vendor and invoice), purchases made throughout the year may be considered. In this case, it would be more appropriate to reclassify the opening and closing stock differentials as “others” to align them with the net consumption amount reported in the various accounting records.

Validate assumptions and calculation methods: Ensure that assumptions and calculation methods used in preparing the ICV Template are sound.

Grant access to data for certification bodies: Provide the necessary access to specific data for certification bodies that conduct business and issue certifications.

Face disciplinary action for negligence: Companies that submit work with extreme carelessness or intentional avoidance will face appropriate disciplinary action from the relevant departments.

Thorough Evaluation

Comprehensive assessment of company suitability: A thorough assessment of the company’s suitability is required. At this stage, the ICV template and all supporting documents are reviewed to ensure they meet the requirements of MOIAT standards.

ICV Committee approval: The application may be approved by the ICV committee if the evaluation checks are completed satisfactorily. The ICV committee reports to MOIAT, who reviews the certification process. MOIAT then approves the Certifying Body’s established procedures.

Vendor’s approval of ICV: The supplier reviews and approves the unsigned ICV Certificate sent to the Certifying Body.

Official ICV Certification Event

Certifying Body issues formal ICV Certificate: After the certifying body formally issues the ICV Certificate, the supplier must submit it to a participating enterprise.

Engaging ICV Experts in the UAE

The In-Country Value (ICV) program is strategic. ICV methods evaluate business operations, including procurement, employment, and supply chain management. Businesses are measured by local spending, employment generation, and supplier/manufacturer engagement. The program increases localization of goods and services, benefiting the UAE economy and advancing long-term aims for a healthy, diversified economy. To preserve records, monitor performance, and stay current in manufacturing and marketing, organizations should use top ICV Consultants in UAE.

Conditions to Obtain the ICV Certification

• The supplier must have a valid trade license from the relevant local authority in the UAE and be registered with the applicable authority that requires the ICV certification.
• The supplier must have a physical presence in the UAE and be engaged in a product or a service that contributes to the UAE’s economy and development.
• The supplier must appoint an empanelled certifying body to issue the ICV certificate and pay the certification fees, which may vary depending on the size and complexity of the supplier’s business.
• The supplier must ensure that the figures entered in the ICV certificate application form match with the audited financial statements and that the financial statements are prepared according to the IFRS.
• The supplier must obtain a separate ICV certificate for each legal entity or trade license, even if they have the same owner or activities. However, if the supplier has multiple branches in the same emirate that conduct similar activities and have the same ownership, they can obtain a combined ICV certificate for that emirate.
• The supplier must recertify their ICV certificate every year using the latest financial statements and guidelines. The supplier can also recertify their ICV certificate during the validity period using the same financial statements, but the validity period will remain the same as the first issuance.