The introduction of the In-Country Value (ICV) program in the Middle East has brought a drastic change in both the national economy and the personal economic growth of small and big organizations in the UAE. In January 2018, the Abu Dhabi National Oil Company, also known as ADNOC, the national oil corporation initiated ICV Certification in UAE to urge companies to localize their business and boost national economic growth.
If you are an entrepreneur looking for business opportunities in the UAE, you might be wondering whether or not your company needs ICV certification. Hence, in this blog, we will answer some of the most common questions about ICV Certification in UAE and its impact on businesses.
ICV Certification in UAE: Explained
The ICV certificate, also known as the In-country Value certification, is a program launched by the Abu Dhabi National Oil Company (ADNOC) to evaluate and encourage the participation of local companies in the oil and gas industry, thereby enhancing their contributions to the UAE’s economy.
The ADNOC issues this document certifying the level of In-Country Value achieved by a company through its operations and activities in the country. The performance is assessed against various criteria such as local spending, local employment, and local investment. The main goal is to increase the number of local companies in the oil and gas industry and further support their growth through privileged treatment when bidding for contracts.
Thus, to obtain an ICV Certification in UAE, companies need to go through an evaluation procedure that assesses their compliance with the criteria of the program. Upon issuance, the certificate stays valid for 14 months and can be renewed upon successful re-evaluation.
Goals of ICV Certification in UAE
The ICV certification program was launched with the following goals:-
- GDP growth – Promoting the growth of national GDP by procuring more products and services domestically and increasing the foreign direct investment in Abu Dhabi.
- Development of human capital – Reinforcing local labor force capabilities by providing them access to private-sector employment opportunities.
- Adoption of technology – Raising expenditures in research and development (R&D) and accelerating technological advancement and application within the country.
Businesses eligible for ICV Certification
The following entities are required to obtain ICV Certification in the UAE:-
- Suppliers and contractors of the Abu Dhabi National Oil Company (ADNOC) and its subsidiaries. For example, drilling contractors, engineering firms, logistics providers, etc.
- Companies that bid on government contracts. For example, construction, transportation, and healthcare.
Benefits of ICV Certification in UAE
To understand the significance of an ICV certificate, let’s have a look at some of its most noteworthy benefits:
- Localization and development
- Foreign investments
- Job opportunities
- GDP growth
- Research and development
- Involvement of the private sector
Criteria to obtain an ICV Certificate in UAE
There are specific eligibility requirements that companies must meet to receive ICV certification in the UAE. For instance,
- Companies need to be registered with the appropriate government agency and have an active business license.
- They must be physically present in the country, working on a product or providing a service.
- Apart from general qualifications, companies must also fulfill specific ICV requirements that align with their industry.
- In order to be certified, businesses must meet the standards specified in the ICV program guidelines of each industry.
- Anauthorized ICV certification body will conduct an independent audit of the company to evaluate its performance and provide the certification based on the ICV score.
On the whole, businesses should be committed to the expansion and improvement of the UAE and the local economy.
Step-by-step process to obtain ICV Certification in UAE
The Ministry of Industry and Advanced Technology (MoIAT) has organized the ICV certification process into four easy steps. The tax consultants in Dubai can help you stay a step ahead of time in obtaining your certificate:-
Release the audited financial statements
The first requirement for ICV certification in the UAE is the revelation of audited financial records. Companies that are less than 10 months old must create their financial report using management accounts or in accordance with International Financial Reporting Standards (IFRS(), a universally accepted vocabulary for financial reporting. IFRS increases the transparency and reliability of the financial reports of the company, thereby helping them gain the trust and credibility of stakeholders.
Fill out the ICV certificate template
The ICV template is a standard form that determines the ICV score of a company. it can used to record data on various aspects of a business’s operations, including local sourcing, investment in community services, Emirati employment, and other elements supporting the growth and success of the economy. Hence, companies are required to adhere to the instructions of the ICV program when filling out the form.
Get your form evaluated
Next, the company owner must approach a recognized certified body to get their ICV template assessed. These certified bodies can be independent businesses that have been permitted to assess and certify businesses for their ICV compliance. Upon review, the certifying body conducts an on-site audit to confirm the information.
Obtain the ICV certificate
The last and final step to ICV certification in UAE is receiving the certificate. After examining the ICV template and other supporting documentation and confirming the company’s compliance with the program’s requirements, the certifying body will issue the ICV certificate.
Thus, the ICV Certification of ADNOC indicates the company’s dedication and commitment to boosting the local economy. Besides, it can offer several preferential advantages. Shuraa Tax consultants in Dubai can make it simpler for you and guide you through each step making it more seamless and time-effective.
Validity of ICV Certificate in the UAE
The validity of an ICV Certificate is usually 14 months from the date of issuance. Hence, businesses must ensure to renew it accordingly to continue receiving ICV benefits in the UAE. During the renewal process, the company must submit revised financial statements and a fresh ICV template confirming their compliance with the program’s guidelines. The certifying body will then assess the submitted data and issue a renewed ICV certificate accordingly.
Key considerations for obtaining an ICV Certificate
Here are some key points to consider while getting an ICV Certification in UAE:-
- Make sure that your financial statements that are submitted for ICV comply with IFRS, the mandatory accounting standard in Dubai.
- Businesses with two or more branches in the city are eligible for ICV Certification.
- If the business owner is registered under the Wage Protection System (WPS), then their salary will be included, which would be limited to AED 120,000 each month for each owner.
- The supplier’s internal costs will not be included in the calculations, except the depreciation cost
- The headcount of employees will be considered for a year.
- Suppliers from the Mainland region will get a 10% reward in the ICV Score.
- Payments made to governmental authorities and licensed organizations by the supplier will be counted as 100% ICV.
Expedite your ICV Certification with Shuraa Business Setup
The process of obtaining ICV Certification in UAE involves a thorough assessment conducted by the relevant bodies, entailing the submission of appropriate documents such as financial statements and other business-related records for verification.
Shuraa Business Setup assists with the entire company formation process in the UAE, right from arranging all the supportive documents to post-setup services. Moreover, they will help your company secure all the necessary certificates, licenses, permits, visas, and other statutory documents. Contact Shuraa today for a free consultation!
