In the middle east, the In-Country Value (ICV) program has been introduced within Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Its evolution since its implementation has seen growth in both, the national economy and the personal economic growth of small and big organizations and corporations.
The In-country Value certification, also known as the ICV certificate is an initiative taken by the Abu Dhabi National Oil Company, also known as ADNOC, the national oil corporation, in January 2018 and became effective from April 1, 2018, proved beneficial not only to the individual suppliers and businesses but makes sure to boost the country’s economy as well.
The program contributes to urging local suppliers to more concentrate on obtaining an In-country Value Certificate. The participating institutions in the United Arab Emirates, are also welcome to join to localize their business and hence help encourage national economic growth. The schedule of the national ICV certificate is functioned by MoIAT (Ministry of Industry and Advanced Technology) to generate an optimized value of oil and gas in the UAE.
What is an ICV Certification in UAE?
ICV Certification is a program launched by the Abu Dhabi National Oil Company (ADNOC) in UAE to measure the contribution of goods and services produced by businesses within the UAE, as well as the local investment and employment, in the oil and gas sector.
An ICV Certificate is a document issued by the ADNOC in UAE that certifies the level of In-Country Value achieved by a company operating in the UAE.
ICV Certification in Abu Dhabi and The Abu Dhabi Local Content Programme (ADLC) was formed with the following goals by the Abu Dhabi Department of Economic Development (ADDED):
- GDP Growth: Promoting GDP growth by sourcing more products and services domestically, expanding foreign direct investment in Abu Dhabi, and boosting the GDP contributions of the private sector and SMEs;
- Human Capital Development: Increasing Emiratis' access to private sector employment opportunities and strengthening local labor force competencies;
- Technology adoption: includes raising research and development (R&D) expenditures, boosting national industry competitiveness, and accelerating technological advancement and application.
What Business should get an ICV Certification?
All suppliers and contractors of the Abu Dhabi National Oil Company (ADNOC) and its subsidiaries are required to obtain ICV Certification. This includes companies that provide goods and services to ADNOC, such as drilling contractors, engineering firms, and logistics providers.
The ICV Certification program is also applicable to companies in other sectors that wish to do business with the UAE government. For example, companies that bid on government contracts in industries such as construction, transportation, and healthcare may be required to obtain ICV Certification.
To obtain an ICV certification, suppliers must collaborate with specific vendors. There are now 23 certifying firms, with BMS Auditing being the renowned ICV Certifying Body in UAE with ADNOC Approved ICV Auditors to get you ICV Certification in UAE.
Benefits of ICV Certification in UAE
Since its inception, the ADNOC ICV program has helped more than 1,500 Emiratis find employment in the private sector and accounted for over Dh44 billion ($12 billion) in the economy of the UAE. Additionally, ICV certification has been granted to more than 3,000 businesses in the UAE.
The ICV program examines a number of variables, including investment, employment of Emiratis, funding from expatriates, income earned outside of the UAE, and a rise in investment. As a result of this program, a new business line has emerged that must be supplied from the UAE.
- The ICV certification boosts the private sector's participation, increases the GDP's diversification, and localizes crucial supply chain components.
- The ICV certification also helps people owning small-chain businesses or medium-sized businesses to expand and increase their developments as the supply chains are easily localized.
- The ICV certification holders can benefit from the contract from the federal authorities and partner corporations.
- For the purchase of goods, ADNOC tends to promote local manufacturing units bidding directly for a tender. Accordingly, for all purchasing tenders the local manufacturing bidders or their Local Agents will be preferred over Agents of Manufacturers located abroad during the tender evaluation. This in return help uplifts the ICV score of the suppliers and benefits them personally along with lifting the nation’s economy.
Eligibility to Obtain an ICV Certificate
Companies must meet specific eligibility requirements in order to receive ICV certification in the UAE. Here are some things you should consider to see if you are eligible to obtain ICV Certificate.
- Businesses that want to apply for ICV certification typically need to be registered with the appropriate government agency and have a current trade license.
- In addition, they must be physically present in the UAE and working on a product or offering a service.
- Organizations must also fulfill specific ICV requirements that correspond to their industry sector in addition to these general qualifications.
- Each industry sector's specific ICV program guidelines specify the standards that businesses must meet in order to be certified. For instance, the ICV program takes into account, among other things, the degree of local content in the products and services offered, the investment in regional infrastructure and amenities, and the degree of workforce Emiratization in the oil and gas industry.
- Companies must go through an audit conducted independently by an authorized ICV certification body in order to receive ICV certification. In accordance with the pertinent ICV requirements, the certification body will evaluate the performance of the company and award an accreditation based on the ICV score.
- As a whole, the obligations for ICV certification are made to make sure that certified businesses are committed to the expansion and improvement of the UAE and to the local economy.
How to obtain ICV Certification in UAE?
Companies can obtain ICV Certification in the UAE by complying with the ICV Financial criteria established by ADNOC and submit their ICV score to ADNOC. To comply with the ICV criteria, companies may need to make changes to their operations, such as increasing local investments, sourcing more goods and services from local suppliers, and hiring and training more UAE nationals.
Joining with BMS Auditing ICV audit and certification services, you can be a step ahead of time in obtaining ICV Certification in UAE. However, here's the ICV Certification process,
1. Release audited financial statements
The disclosure of audited financial records is the first requirement for ICV certification in the UAE. For newly formed companies that are less than 10 months old, financial reports must be created utilizing management accounts or in accordance with International Financial Reporting Standards (IFRS).
A set of accounting standards known as IFRS offers a universally accepted vocabulary for financial reporting. Using IFRS will increase a company's financial reporting's transparency and reliability, both of which are crucial for gaining the trust and credibility of stakeholders.
2. Fill ICV Certification
The ICV score of a company is determined using the ICV template, a standard form. The template is made to record data on various aspects of a business's operations, including local sourcing, investment in community amenities, employment of Emiratis, and other elements that support the growth and success of the local economy. Companies must adhere to the ICV program's instructions when filling out the ICV template.
3. Evaluation of Form
Approaching one of the recognized certifying bodies for assessment of the ICV template is the third step in obtaining ICV certification in the UAE. Independent businesses that have been given permission by the ICV program to assess and certify businesses for their ICV compliance are known as authorized certifying bodies.
These certifying organizations have the knowledge and tools required to assess the ICV template and other supporting materials supplied by the business. After reviewing the supplied information, the certifying body will carry out an on-site audit to confirm the information.
4. Obtain IVC Certificate
Receiving the ICV certificate is the last step in the UAE ICV certification process. The certifying body will issue the ICV certificate once they have examined the ICV template and any supporting documentation and found that the business complies with the program's requirements.
ADNOC ICV certification shows a business's dedication to boosting the local economy and can offer advantages like special consideration in government tenders and deals. Our ADNOC ICV-approved auditors make it simple for you to obtain ICV certification and guide you through each step of the way, making a complex task like this much more seamless and time-effective.
Validity of an ICV Certification
An ICV certification in UAE usually has a 14 Months validity from the date of submitting audited financial documents, or after new financial statements have been issued (whichever is earlier). To keep receiving ICV benefits after a year, businesses must renew their ICV certification.
Companies must submit revised financial statements and complete a fresh ICV template throughout the renewal process to prove that they are still in compliance with the program's guidelines. The certifying body will then assess the updated data and, if the company persists to meet the ICV program requirements, issue a renewed ICV certificate.
It's important for companies to maintain compliance with the ICV criteria throughout the year to ensure that their ICV score meets the requirements for renewal. Here's how you should improve ICV Score.
Key Consideration to obtain ICV Certification in UAE
If you have decided to get an ICV Certification, here are some key considerations where you should look for and enhance it.
- International Financial Reporting Standards (IFRS) financials: Financial statements to be submitted for ICV must be comply with IFRS, the mandatory accounting standards in Dubai.
- Branches eligibility for one certificate: Businesses having two or more branches in emirate under one ownership is eligible for ICV Certification.
- Owner salary credits: Owners salary will be included if they are registered under Wage Protection System (WPS). It will be limited to AED120,000 each month for each owner.
- Internal costs: Except for depreciation cost, all of a supplier's internal costs will not be included in the calculations.
- Headcount of employees: Number of employees will be accounted for a year.
- Credit to mainland suppliers: If you are a supplier from Mainland UAE, You will get an 10% reward in ICV Score.
Payments to governmental authorities: Payments made by the supplier to governmental free zone authorities and organisations with licenses will be counted as 100% ICV.
ADNOC Approved ICV Auditors in UAE
BMS Auditing is a reputable auditing firm based in the UAE, offering a range of financial and compliance services to businesses of all sizes. As an approved ICV auditor with ADNOC, We can provide comprehensive ICV Certification Services to companies operating in the UAE.
Our ICV Auditors work closely with clients to ensure that their compliance with the ICV criteria is accurately measured and reflected in their ICV score. By partnering with BMS Auditing, clients can be assured of a rigorous and reliable ICV audit process that meets the requirements of ADNOC.
The ICV certification has evolved since its implementation and is determined to keep growing. Currently, the ICV in UAE is in its third version, and though the ICV score is not affected in the UAE, the CSR activities of the corporations are captured and displayed on the ICV documentation and a clear corporate structure can be profoundly seen. This makes sure of the fact that doing business in the UAE is a long-term relationship that benefits the nation and the stakeholders.
The program also protects various initiatives other than oil and gas. The ICV certification authorizes companies with value ratings that show how much the nation is benefitting from that corporation. Strategic considerations, GDP diversification, and Emiratization were encouraged by its implementation.
1. Is ICV certification restricted to SMEs?
No, the size of the company does not affect ICV certification.
2. How long will it take to receive the certificate for the program?
Depending on each supplier's circumstances, different amounts of time are required to process each application. It relies on the business's size, the number of workers, and its willingness to give the certification agencies the necessary paperwork. The application shall be processed within a month after receiving all necessary documents.
3. Can vendors who have already received an ICV certificate at the local scale use it at the national degree?
It is true that suppliers who have received local ICV certification may use their certificates at a national level.
4. How much does it cost to get a certificate from the National In-Country Value Programme?
The costs are set by the certifying bodies and are established using the following criteria.
- The company's size (small, medium, and large) as measured by the number of workers, cost, and revenue per year
- The ability of the business to implement an integrated accounting system
- The facility's nature: industrial or commercial
5. Can foreign companies obtain ICV Certification?
Yes, foreign companies can obtain ICV Certification in the UAE if they meet the program's requirements. Foreign companies must comply with the same ICV criteria as local companies. Foreign companies must also calculate their ICV score based on their compliance with these criteria and submit the score to ADNOC for review.
6. What happens if a company failed to obtain ICV Certification in UAE?
The consequences of failing to obtain ICV Certification in the UAE depend on the company's relationship with ADNOC and its subsidiaries. The effects of not getting an ICV Certification can lead to the following,
- Inability to Bid on ADNOC Contracts
- Damage to Reputation
- Missed Business Opportunities
- Possibilities for Potential Penalties