In 2018, the Abu Dhabi National Oil Company (ADNOC) launched a procurement led In-Country Value (ICV) program to boost Emiratisation, GDP diversification, and strategic concerns.
This program was such a success that this year the Abu Dhabi Department of Economic Development (ADDED) and AL DAR decided to implement a unified ICV certification process for suppliers in the UAE.
1. What is the ICV certification in the UAE?
At its core, the ICV certificate measures the contribution of a company towards the local economy. In other words, the total amount that a supplier spends that remains within the UAE or contributes to the UAE is calculated and considered as ICV.
Therefore, some main areas that are considered for ICV certification are goods manufactured, revenue from outside the UAE, Emiratisation, investment, and expatriate contribution.
Obtaining an ICV certification means that a supplier or contractor has undergone the process and received a validated ICV score from one of the independent pre-approved ICV certifiers. This process seeks to ensure the legality and accuracy of the information provided by suppliers related to ICV contribution, as well as to guarantee that suppliers’ ICV scores are evidence-based and determined in alignment with pre-defined methods.
Large businesses, small startups, and everything in between can apply for an ICV certificate as certification is not limited by company size. Once you have received an ICV certificate, it is valid for 14 months from the date of issuance of the Audit report.
2. What are the goals of the ICV certification program?
When the UAE introduced the Unified ICV program a couple of years ago, there were three main objectives. Those were (and continue to be) focused on developing more employment opportunities for Emiratis in the private sector, diversifying the gross domestic product (GDP) by sourcing more products and services within the UAE, and ensuring that strategically critical links within the supply chain are localised.
By diversifying the local economy, increasing Emiratisation in the private sector, strengthening supply chains, and transferring knowledge to local companies, the UAE foresees significant economic benefits. Similarly, these goals are aligned with the economic goals of the implementation of the centralised ICV certification process.
By offering a unified ICV program, the ICV certification is being streamlined into a single certificate that can then be utilised by any primary or secondary supplier who wishes to be involved in the procurement process of the participating entities.
3. What are the benefits of obtaining an ICV certification?
In some cases, you may be required to obtain an ICV certification.
For example, all businesses based in Abu Dhabi that are applying for governmental and semi-governmental procurements must have an ICV certification, as it accounts for a significant portion of the financial evaluation. Moreover, any legal entity that intends to participate in a tender with ADNOC or any of its group entities needs to obtain an ICV certificate.
For companies, having an ICV certificate is incredibly beneficial as it provides them with the opportunity for the first right of refusal in the tender process.
If you don’t have an ICV certificate, you can still participate in ADNOC tenders and procurements. However, your ICV score will be computed as zero in the bid evaluation, putting you at a significant disadvantage when compared to other companies that have an ICV score. Therefore, it is in your best interest to get your ICV certification.
4. Who are the certifying bodies and participating entities?
To verify the numbers in the ICV certificate, ADNOC requires a third-party verification to be administered by one of its certifying bodies (CBs). Presently, there are ten authorised CBs who can issue ICV certificates based on their evaluation.
As one of the approved CBs, MBG Corporate Services will work with you to help you obtain your ICV certificate quickly and efficiently.
No matter your enterprise, you will benefit from working with a dedicated team of experts at the top corporate services in UAE. Outfitted with plenty of experience in issuing ICV certificates across multiple industries, these experts can administer the assignment remotely or onsite.
What’s more, by working with the MBG Corporate Services team, you can benefit from their suggestions on how to improve your score.
For some organisations, this means restructuring organisational processes, while for others, it requires supply chain optimisation or legal entity consolidation. Whatever is the case with you, these experts know what it takes to improve the areas that affect your ICV score.
5. How do I obtain an ICV certification in the UAE?
In order to be issued an ICV certification, you are required to provide audited and approved financial statements, as well as other documents that are requested by the certifying body.
Your ICV grade is evaluated based on the financial information that you provide, and there is no minimum score for participation in the tenders. The ICV certificate will be based on the last audited financial statements, which cannot be older than two years from the certification year.
If your financial statements are complete and approved, then your ICV certificate should be issued within two weeks. The cost of obtaining an ICV certificate varies depending on the certifying body; however, you can receive quotations from the certifying bodies through the ICV certificate platform.
If your company has multiple branches, then they can be included in one ICV certificate if they operate in one emirate and have identical activities.
However, if the branches are located in different emirates, they each must have their own certification. Additionally, free zone companies are also able to obtain an ICV certificate. It is the supplier’s responsibility to have the revised ICV certificate processed within two months of the issuance of audited financial statements.
Are you considering applying for an ICV UAE certification? If so, what do you think are the most significant benefits of this program? What challenges do you anticipate? To learn more about this process, keep reading for answers to your most pressing questions about ICV certification in the UAE.
Let us know your thoughts and any further questions you have about ICV certification in the UAE in the comments below.