ICV Certification in the UAE
The UAE is known for making active efforts to continually improve the region’s business environment. The ICV (In Country Value) Certificate is one of the many initiatives that encourage economic growth in the country. The ICV program is a collection of conditions that ADNOC registered suppliers have to comply with in order to continue to work with ADNOC. Upon meeting these conditions, suppliers can obtain ICV certification which gives them access to a variety of business opportunities. The biggest impact of the ICV Certificate is its weightage in tender evaluations. Suppliers having this certification will have an edge in the selection process.
The ICV program consists of two main parts: ICV Certification and ICV Implementation. Today, we’re going take a detailed look at the ICV Certificate, its benefits, and how can you obtain an ICV Certificate ADNOC compliant.
ICV Certificate Meaning
What is ICV Certificate? This certificate is awarded to ADNOC suppliers after they pass a set evaluation. It is part of the Unified ICV Program that was introduced to stimulate the local supplier market. The evaluation is carried out by empaneled Adnoc ICV certification agencies. These bodies verify a supplier’s financial records to determine whether they are complying with the set conditions or not.
The ADNOC ICV Certificate was initiated in order to boost ADNOC’s participation in the development of local suppliers. The certificate gauges how suppliers have made contributions to improving In-Country Value. Their contribution is calculated in the form of an ICV score. The main focus of ICV Certificate ADNOC is to encourage suppliers to:
- Focus on enhancing their in-country value creation through their business practices
- Invest in business development and skill enhancement
This certification acts as an incentive for suppliers who make an active effort to invest in development and sustainability. The end goal of the ICV Program is to boost human capital development, technology adoption, and GDP growth.
Once the certificate has been issued to a supplier, it remains valid for 18 months. During the valid period, whenever suppliers participate in ADNOC’s group tenders, their bid evaluation will include their ICV score. Suppliers who aren’t Certified can participate as well. However, their ICV score will be counted as zero, leaving them at a disadvantage.
Entities other than ADNOC have also implemented this. However, each entity has its own policies of implementation.
ICV Certificate Sample
The ICV Certificate is, as its name suggests, a certification. It is a form of acknowledgment that states that an entity submitted its records to one of the empaneled ICV certification bodies in UAE. And the body checked their records and verified that the entity has met In-Country Value requirements in their previous financial year.
Have a look at the below ICV certificate sample:
The certification contains information about the company to which it was granted. Also, it has a section called “In-Country Value Details” in which the recipient’s total ICV score is broken down.
The ICV score is calculated with the following formulae:
How to Get ICV Certificate in UAE?
Ever since the ICV program has been announced, a lot of business owners have been googling “how can I get ICV certificate in UAE?”. Fortunately, the ICV certification process for the ICV program is relatively simple.
- Companies need to produce IFRS based financial statements of their business activities. These statements must be audited by an auditor who has been licensed by the Ministry of Economy. The financial statements shouldn’t be older than 2 years from the date of the certification request. Companies that are less than 10 months old and haven’t undergone a financial audit yet can use their management accounts as an alternative. Bear in mind that if the management accounts documents are older than 9 months, the company will have to undergo an audit.
- After your documents are in order, you can fill the ICV Submission Template according to the guidelines provided by ADNOC over here.
- Once you have correctly filled the submission form, you can appoint any ICV certification companies in UAE for the verification process. The certifying company must be appointed from the Adnoc ICV certification agencies list.
- The certified body will analyze your records and calculate your score based on the given criteria. You will then receive your certificate with your total score written on it.
Frequently Asked Questions (FAQs)
What is the In-Country Value (ICV) Program?
The ICV program was launched by ADNOC in 2018. Its goal is to involve more local suppliers in the selection process while also accelerating the development of UAE citizens. Also, the program aims to localize the core functioning of UAE’s gas and oil industry.
What is the In-Country Value (ICV) Certificate?
The ICV program was initiated by Abu Dhabi National Oil Company (ADNOC) in 2018. The ICV certificate is part of the ICV program and is must for any entity that wants to become a supplier of ADNOC. In other words, an ICV certificate is a proof that an entity has been certified as an ADNOC supplier by independent pre-approved ICV certifiers.
Since Late 2019, the domain of ICV program (including ICV certificate) has been expanded to cover other government and semi-government entities.
The process of ICV certification involves evaluation of an entity’s value-added contribution to the United Arab Emirates in areas including the following:
- Local Manufacturing
- Local investment
- Procurement of third party goods and services
- Expatriate contribution
- Emiratization of labor
- Generation of income from outside the United Arab Emirates
What is the Aim of ICV Certification?
One of the main aims of the ICV program and the ICV certification is to strengthen supply chains, diversify and strengthen the UAE’s economy, increase Emiratization in the private sector and transfer latest technology and knowledge to the local business entities.
Who is the Program Beneficial for?
Impact of ICV on UAE’s economy is massively amazing. The program aims to develop and strengthen commercial and social benefits that will lead to sustainable economic development in the long run. It will help in GDP growth, create new job opportunities, and help local businesses tap into more business opportunities. The ICV program will benefit all stakeholders in the long run.
How to Get Certified for ICV?
The certification process is quite simple, you must submit IFRS based financial documents of your company that have been audited by a licensed auditor. These documents shouldn’t be any older than two years. Entities that are 9 months or less than 9 months old can submit their un-audited management accounts of the last 9 months instead to the certifying bodies. After arranging the necessary documents, you can fill in the submission form and submit (along with your documents) to any empaneled certified body. They will verify your records and certify you. You can find all the resources for ICV Certification here.
Who is Authorized to Certify?
Only empaneled certifying bodies can issue ICV Certificates. You can find information about all certified bodies here.
How Much Time Does it take for a Certifying Body to Issue the ICV Certification to an Entity?
A certifying body takes around 3 to 15 days for issuing the certificate to an entity provided all the required information is provided.
Cost of Obtaining ICV Certification?
The fee an entity pays for obtaining an ICV certificate isn’t fixed and varies depending on the body issuing the certificate. Therefore, the ICV platform permits the applicant entity to obtain quotations with regards to obtaining the certificate from different certifying bodies.
How Frequently Will You Have to Renew Your Certificate?
Once issued, it remains valid for 14 months. The duration is counted from the issuance date of the financial statements or when a new set of audited financial statements is given.
Can the Percentage of the ICV Score Vary from One Certifying Body to Another?
No, the percentage of the ICV score cannot vary as all the forms and criteria used for determining ICV score have been standardized among all the certifying bodies.
Which Entities Require ICV Certification from their Prospective Suppliers?
All government and semi-government institutions/ entities operating in the emirate of Abu Dhabi require an In-Country Value certificate from companies that are interested in participating in their procurement processes.
What are the Benefits Associated with Obtaining the ICV Certification?
Obtaining certificate from a recognized certifying authority is a requirement that is applicable to all those businesses operating in the Emirate of Abu Dhabi that are interested in participating in the procurement process/ tenders conducted by government and semi-government entities.
Is the Requirement of Obtaining the ICV Certification Mandatory or Optional when Participating in Tenders Conducted by Government Entities?
The requirement of ICV certification is not mandatory for companies that wish to participate in procurement processes/ tenders of all government as well as semi-government organizations in the Emirate of Abu Dhabi. Although, the ICV score of entities that don’t have the ICV certification will be considered as zero.
How is the ICV Certification Beneficial If One is not Participating in Government Tenders?
Companies that are looking to secure procurement tenders in Abu Dhabi are probably expected to purchase from entities having ICV certificates so that to improve their own ICV score.
Are Free Zone Companies Eligible for Obtaining ICV Certification?
Yes, the companies operating in different free zones are eligible for obtaining the certificate from any certifying body.
Is there Any Limit or Minimum Score Requirement for Participating in Government and Semi-government Tenders?
No, there is no limit or minimum ICV score requirement for entities that wish to participate in government and semi-government procurement tenders.
Can an Entity Located Outside the Emirate of Abu Dhabi Use the ICV Certification to Participate in Abu Dhabi-based Government Tenders?
Yes, the companies located outside Abu Dhabi can use their ICV certificates to bid in tenders conducted by government entities under the Local Content Program.
If a Company has Multiple Branches in 3 Emirates of the UAE, is it Possible for the Company to Obtain a Combined Single Certificate for All its Branches?
Branches operating in the same Emirate having similar activities and identical ownership are eligible for one combined ICV certificate.
Is ICV 2.0 Certificate and ICV 3.0 Certificate Different?
ICV 3.0 certificate is the certificate which is demanded by all government and semi-government entities when conducting procurement tenders. While, ICV 2.0 is an older certificate which entities were required to submit to ADNOC with reference to participating in their procurement tenders.
Are the ICV Certification and ICV Implementation Programs Similar?
The certification program is aligned between every participating entity. It shall be recognized by all the entities that are participating.
The implementation program will be unique for every entity. It shall cover the way in which every entity will use their certificate in their business activities.
Will the Tendering Process be Different for Every Participating Entity?
While the certificate is unified, the way it will be used by every entity shall vary. Therefore, the tendering process shall vary.
How Many Certificates Can Every Supplier Receive?
Each supplier may only issue one certificate per business license. This certificate can be used with all participating entities in accordance with their implementation policies.
Is the ICV Certificate Only Limited to Small and Medium Sized Entities or Large Size Organizations Also?
The requirement of obtaining the ICV certification is applicable to all the companies, irrespective of their size or background, that want to be considered as certified suppliers of different government and semi-government organizations.
What is the Difference Between Abu Dhabi Local Content Program and ADNOC's In-Country Value Program (ICV)? Are there Two ICV Certificates?
Both the programs are different with regards to implementation in tenders, but all the programs that are administered by government or semi government entities, including the local content program, will require one certificate which is the ICV 3.0.