The United Arab Emirates (UAE) is well-known for its flourishing economy, progressive policies, and appeal as a business destination. The In-Country Value (ICV) Program is one of the UAE government’s major economic development projects.
The ICV Program is initiated by Abu Dhabi National Oil Company (ADNOC) and currently managed and monitored by MoIAT. (Ministry of Industry and Advanced Technology). This program is a strategic initiative to strengthen the national economy, and boost the local industrial growth of the nation. However businesses are unsure whether they need an ICV Certification or is it mandatory to obtain an ICV certification.
This blog discusses the ICV program’s importance, certification requirements, and whether organisations are required to earn the ICV certificate.
Understanding The ICV Program
The UAE Ministry of Industry and Advanced Technology (MoIAT) launched the ICV program as a strategic strategy to boost local enterprises’ contributions to the country’s economy. It encourages businesses to prioritise local suppliers, invest in local workers, and contribute to the overall growth of the UAE economy.
The ICV program assesses a company’s in-country value using numerous parameters, including:
– Local procurement
-Emiratization activities, including employing the Emiratis and investing in local manufacturing
– Spending on research & development
By getting an ICV certificate, organizations demonstrate their commitment to the UAE’s economic goals and their support to local economic development.
Is the ICV Certificate Mandatory?
Although the ICV certificate is not a must-have for all enterprises in the UAE, there are specific sectors that require ICV certification and certain scenarios that make acquiring the ICV qualification critical. Let us explain the significance of obtaining ICV certification for following divisions:
1. Government or semi-government contracts
The ICV certificate is required for enterprises bidding on contracts with government bodies.
– Semi-governmental organisations
– Companies that have implemented the ICV include ADNOC, Etisalat, and TAQA.
These organisations analyse tenders using ICV scores, providing preference to enterprises who contribute more significantly to the local economy.
2. Private Sector Participation
While private sector enterprises are not obliged to receive an ICV certificate, many choose to become accredited in order to form collaborations with government-linked organisations. This permits them to remain competitive and receive preferential consideration in tendering processes.
3. Free Zones and Mainland Companies
Businesses operating in free zones or under mainland licenses are generally not required to obtain an ICV certificate unless they do business with ICV-compliant government-linked enterprises. However, earning the accreditation might help a company’s reputation and business possibilities.
Why Should Businesses Consider Obtaining an ICV Certification?
The ICV Certificate is very essential for companies to be involved and have an edge in the tendering processes.
Here are some of the strong reasons why an ICV Certificate is advantageous for businesses:
1. Competitive Advantage:
An ICV certificate elevates your company’s position in government tenders. Organisations like ADNOC frequently prioritise vendors with high ICV scores, ensuring that these enterprises are given advantage during the procurement process.
2. Increased Business Opportunities:
Many significant commercial sector organisations, particularly those that support government projects, are implementing ICV concepts benefit substantially with the ICV Certification. Having an ICV certificate enables enterprises to enter these attractive industries with a preferential status in bidding for tenders and contracts.
3. Demonstrating Commitment to Local Development:
The UAE government values organisations that support the local economy. Businesses that earn an ICV certificate can demonstrate their dedication to Emiratization, local procurement, and sustainable development.
4. Attracting Foreign Investment:
Businesses possessing an ICV accreditation demonstrate stability and consistency with UAE economic policies. This may make the company more appealing to overseas investors seeking to partner with complying entities.
Steps to Get an ICV Certificate
To acquire an ICV certification for your business, the following procedures should be followed:
1. Find an Approved ICV-Certifying Body to Obtain Certification
The UAE government has authorised some certifying agencies to provide ICV certificates. Businesses must choose one of these organisations before beginning the certification procedure.
2. Prepare Financial Documents
A company’s ICV score is calculated using its audited financial statements. These must be prepared in accordance with international financial reporting standards (IFRS) and cover the most recent fiscal year.
3. Parametric Evaluation
The certifying body will analyse several indicators, including the percentage of local procurement.
– Emirati employee salaries and investments in local assets.
– Spending on research & development
4. Certificate Issuance
After the examination is completed, the certifying organisation will issue the ICV certificate, which is valid for one year.
5. Annual Renewal
Companies must renew their ICV certificate every year, depending on current financial accounts.
Challenges in Obtaining an ICV Certificate
While obtaining an ICV certificate is uncomplicated, organisations may face several challenges:
1. Understanding Complex Criteria
The metrics used to compute the ICV score might be complicated, particularly for businesses new to the UAE or unfamiliar with its regulations.
2. Maintaining Accurate Financial Records
Audited financial statements are required for certification. Any errors or non-compliance with IFRS can result in delays or rejection.
3. Aligning with Program Objectives
Some firms may struggle to match their operations with the goals of the ICV program, especially if they rely substantially on imported goods or services.
How to Maximize Your ICV Score?
Businesses can maximise the benefits of the ICV program by implementing the following strategies:
1. Focus on Local Procurement
Prioritise obtaining materials and services from local suppliers to improve your ICV score.
2. Invest in Emiratization
Hire and train UAE citizens to meet Emiratization quotas and contribute to local workforce growth.
3. Strengthen Local Partnerships
Collaborate with local manufacturers and service providers to improve your ICV results.
4. Commit to Innovation and Sustainability
Allocate resources to research and development, particularly in areas that are consistent with the UAE’s aims for innovation and sustainability.
ICV in Future: Impact in the UAE Economy in 2025 & Beyond
As the UAE’s economy diversifies, the ICV program is anticipated to become more integrated into company operations. Here are a few projected trends:
1. Expanding into New Sectors
While the program is now focused on oil and gas, telecommunications, and energy, it may eventually spread to other industries.
2. Increased Collaboration with the Private Sector
More private-sector companies are likely to adopt ICV principles, resulting in a ripple effect that promotes broader compliance.
3. Focus on Sustainability
The UAE’s dedication to sustainability and innovation may result in adjustments to ICV standards that prioritise green activities and technical advancement.
While the ICV certificate is not required for all firms in the UAE, it is a must for those wishing to engage with government and semi-government agencies. Obtaining the certificate is a strategic decision for private sector enterprises that can lead to new prospects, increased competitiveness, and a commitment to the UAE’s economic goals.
Businesses in the UAE should carefully consider their needs, industry, and ambitions before deciding whether ICV certification is appropriate for their growth strategy.
Get Your ICV Certificate With An ICV Certifying Body – AbstractICV
With its multiple benefits, the ICV program is more than just a regulatory measure; it provides a pathway to long-term company success in the UAE. By aligning with the UAE’s economic agenda, your company may contribute to the country’s prosperity while also expanding its own.
As an ICV certifying body, authorized by the Ministry of Industry and Advanced Technology (MoIAT), we help you with the ICV certification process and offer services such as ICV Consultation, ICV Audit, ICV Identification and Validation etc.
If you want to obtain an ICV certificate or need help with compliance, reach out to AbstractICV today!
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