What is considered as a good ICV score in the UAE?
Achieving a good ICV score is more than just compliance for enterprises operating in the UAE; it is also about unlocking growth prospects, winning competitive government contracts, and supporting the UAE’s greater economic goal.
However, what is really considered as a “good” ICV score in the UAE?
In this blog, let us see what an ICV score is, why it matters, and how organisations might obtain a desirable result.
What is the ICV Score?
An ICV score is a percentage figure derived based on a company’s contribution to the UAE economy. This score is critical for organisations bidding for government or semi-government contracts because it frequently influences their competitiveness in procurement choices.
The program examines organisations using audited financial accounts and certain criteria, which include:
Local procurement – refers to the amount spent on procuring goods and services from UAE based providers.
Emiratisation: The percentage of UAE nationals employed by the company.
Asset investments include contributions to local infrastructure, facilities, and operational capabilities.
Export Activity: Engaging in non-oil exports to diversify the economy.
Operational costs- refer to the total amount of money spent on UAE based services and resources.
Each of these elements adds to the final ICV score, which helps analyse a company’s alignment with the UAE’s economic goals.
What makes a good ICV score?
The concept of a “good” ICV score varies by industry and the specific requirements of the entity evaluating the score. However, the following broad criteria are applicable:
Above 40%: A strong ICV score that demonstrates a company’s significant contribution to the local economy. Such a number puts enterprises in a good position when competing on high-value government contracts.
30-40%: Competitive, particularly in industries with moderate local procurement and Emiratisation potential.
Below 30%: There is potential for improvement, especially in areas such as local sourcing, Emirati hiring, and local infrastructure investment.
While there is no minimum score to qualify for government tenders, better scores are always prioritised, so firms should strive as high as feasible.
Why is a good ICV score important?
Achieving a high ICV score is more than just completing regulatory standards; it’s a strategic advantage. Here’s why it matters:
1. Access to government contracts
A higher ICV score boosts your chances of receiving contracts from government and semi-government agencies. Organisations such as ADNOC, Mubadala, and Etisalat prioritise enterprises with high ICV scores in their procurement processes.
2. Market Competitiveness
In a competitive business environment, an exceptional ICV score distinguishes your organisation and demonstrates your dedication to assisting the UAE’s economic development.
3. Alignment with UAE Vision 2030
The UAE Vision 2030 focusses on economic diversification, innovation, and sustainability. A high ICV score demonstrates your alignment with these national ideals, which improves your reputation as a responsible corporate citizen.
4. Long-term Business Growth
By focusing on local procurement, Emiratisation, and infrastructure investment, you may create long-term growth prospects for your company while strengthening its foundation.
How to get a good ICV score?
Achieving a high ICV needs strategic planning, operational modifications, and constant efforts. Here’s a road plan to assist firms raise their scores:
1. Prioritise Local Procurement
One of the simplest methods to improve your ICV score is to increase your expenditure with UAE based suppliers. Form long-term partnerships with local vendors, and prioritise purchasing products and services from within the country.
2. Invest in Emiratisation
Hiring and maintaining UAE nationals is critical for raising your ICV score. Focus on recruiting Emiratis for specialised positions and providing training programs to help them advance in their careers. Offering competitive incentives and possibilities for growth can also help to increase retention rates.
3. Allocate Resources for Local Investment
Investing in operational assets like facilities, infrastructure, and equipment in the UAE has a substantial impact on your score. Evaluators value demonstrations of dedication to local development.
4. Expand Export Activities
Non-oil exports add to the UAE’s economic diversification. Engaging in export activities not only improves your score but also positions your company as a global leader.
5. Work With ICV Consultants
Hiring professional ICV consultants might be a game changer. These specialists will examine your financials, identify areas for improvement, and recommend actionable measures to raise your score.
6. Ensure Accurate Financial Reporting
ICV scores are based on audited financial accounts. Work with reputable auditors to ensure that your financial statements appropriately reflect your contributions to the UAE economy.
Industry Specific Considerations For ICV Score Calculation
The optimal ICV score varies per industry, as each sector faces unique problems and opportunities while completing the program’s standards.
1. Manufacturing
Manufacturers frequently receive higher rankings since they rely on local sourcing and invest in assets. In this industry, a score of more than 50% is normally desired.
2. Construction
Construction businesses may experience difficulties with local procurement, but they can compensate through Emiratisation and asset investments. A score of 30-40% is competitive.
3. Professional Services
Local procurement opportunities for consulting and professional services are restricted. A score of 25-35% is still deemed good, as long as the company excels in other categories like Emiratization and operational costs.
Common Obstacles in Achieving a Good ICV Score
While the ICV program has significant opportunities, companies frequently confront problems such as:
Limited Local Suppliers: Some businesses rely largely on imported items, which limits the prospects for local procurement. High turnover rates make it difficult to retain Emirati personnel in the absence of strong career development initiatives.
Lack of Awareness: Many organisations do not understand how to strategically coordinate their operations to increase their ratings.
Overcoming these obstacles necessitates a combination of strategic strategy and skilled coaching.
The Importance of ICV Certification in Achieving a Good Score
Companies that bid on government or semi-government contracts must have an ICV certificate. This certification requires presenting audited financials and undergoing a rigorous review of your operations. While certification does not guarantee a high score, it is an important first step in gaining access to the program’s benefits.
How AbstractICV Can Help?
AbstractICV specialises in assisting businesses with the complexity of the ICV program. Our team of professionals offers:
ICV Audit Preparation: Ensure that your financial statements match certification standards.
Score optimisation: Identifying areas for improvement and devising tactics to raise your score.
Compliance Support: Keeping your company in accordance with the most recent ICV norms and requirements.
Boost Your Business Credibility with ICV Score
A high ICV score in the UAE demonstrates a company’s dedication to boosting local economic growth, promoting Emiratisation, and contributing to the country’s overall development goals. While the definition of a “good” score varies by industry, aiming for 40% or more is a decent starting point for most firms.
Companies who prioritise local sourcing, invest in Emiratisation, and collaborate with skilled ICV consultants like AbstractICV can not only obtain a competitive score, but also position themselves for long-term success in the UAE’s flourishing market.
Are you ready to enhance your ICV score? Contact AbstractICV immediately for experienced advice targeted to your company requirements.
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