What is an ICV Certificate in UAE, and How to Get It?

The ICV Certificate, or In-Country Value Certificate, is a cornerstone of the UAE's National ICV Program, designed to stimulate internal economic growth and sustainability. Launched by the UAE government, the program incentivizes businesses that significantly contribute to the local economy.

Companies with high ICV scores gain competitive advantages, such as preferential access to government contracts and potential tax benefits. It supports the Ministry of Industry and Advanced Technology's (MoIAT) goal of improving productivity and promoting local industries.

his blog covers the ICV Certificate in UAE, including its purpose, ICV Score calculation, requirements, application process, validity, and renewal steps.

What is the ICV Certificate in UAE?

The ICV certificate is an official document issued in the UAE to measure a company's contribution to the local economy. So, it is like a scorecard that measures how much your business activities benefit the UAE. These activities include:

• hiring and training of Emiratis
• working with local suppliers
• investing in the country’s economy
• local expenditure on manufacturing

How does ICV Certificate works?

When you apply for an ICV certificate, your business is evaluated based on certain factors, such as:

• How much of your spending goes to UAE-based suppliers?
• The percentage of Emirati employees in your company (Emiratisation).
• Your investments in manufacturing, equipment, local activities, etc.

The result is a score that shows how much value your company adds to the UAE economy. A higher score can give you an edge when bidding for contracts.

Importance of ICV Certificate for Businesses in UAE

If you own a business in the UAE, getting an ICV certificate is proof of your work for the country. This could help you grow by building a reputation and preference for government and private contracts. 

To put it in a structured view, the ICV is important for you as:

1. It helps businesses win more contracts by giving them a competitive edge, especially with government entities like Abu Dhabi National Oil Company (ADNOC).
2. It also encourages businesses to hire more UAE nationals in a way to improve their ICV score.
3. Lower costs by partnering with local suppliers to improve ICV Score
4. Building a positive reputation as a company
5. The ICV program incentivizes investment in local manufacturing by giving tax and operational benefits.

How is the ICV Score Calculated for ICV Certificate UAE?

The ICV score measures how much a company contributes to the UAE economy based on its spending within the country. So the formula to calculate it is:

ICV Score = (Total Expenditure in UAE / Total Revenue) x 100

This is a general formula. The formula is adapted to different cases, as shown below:

For Suppliers in the UAE:

The ICV score looks at the value of goods bought from local suppliers (factoring in the supplier’s ICV score). This includes

• Amount spent on Emirati citizens hired in the company
• 60% of costs for all foreign employees.

Formula:
ICV Score = (Value of Procured Goods x Supplier’s ICV + Emirati Costs + 60% of Expat Costs) / Total Expenditure

For Manufacturers in the UAE:

The ICV score focuses on:

• Manufacturing costs within the UAE.
• Costs for Emirati employees.
• 60% of costs for expat employees.

Formula:
ICV Score = (Costs of Manufacturing in UAE + Emirati Costs + 60% of Expat Costs) / Total Outlay

For Investments in the UAE:

The ICV score is 25% of a company’s assets within the UAE, and it increases based on the value of those assets.

Formula:
ICV Score = Net Book Value of UAE-based Assets / Total Net Book Value

How to Get an ICV Certificate in UAE?

All companies operating within the UAE, including suppliers, manufacturers, and service providers, are eligible to apply. However, make sure that you have a valid trade license and are engaged in economic activities within the UAE.

Steps to Obtain an ICV Certificate

To get your certificate, do the following:

1. Register your business on the ICV Portal with any impanelled ICV-certifying body
2. Fill out your company’s ICV Scorecard, which includes details like your business activities, local expenses, and investments
3. Attach the required documents for validation that include:

• Trade license 
• Audited financial statements 
• Company organisation chart 
• Local purchase records
• Employee data
• Investment details 
• ICV scorecard

Once approved, the certifier issues the ICV Certificate and Factual Finding Report (FFR), signed by both parties.

ICV Certificate Validity and Renewal

The ICV certificate once issued, is valid for 14 months from the date when audited financial statements were issued. 

A supplier can renew their ICV certificate during its validity period if they wish, using the same audited financial statements. However, the certificate's original 14-month validity from the date of the first issue will still apply.

So, suppliers should typically get it renewed every year.

Conclusion

Not many countries have something like the ICV Certificate, which makes the UAE special. The UAE is known for creating an environment that supports businesses while encouraging them to contribute to the local economy. With the ICV program, businesses can succeed while helping the country grow stronger and create more jobs for Emiratis. It’s a great way for companies and the UAE to grow together.