Guide on the In-Country Value (ICV) Certification Process
The ICV process was introduced in the Emirates by ADNOC in 2018. The main goal behind this decision was to enhance in-country value by improving the utilization of local resources. ADNOC’s initiative proved to be quite beneficial for the UAE’s business environment. Thanks to this, a number of other entities have started to show their interest in the ICV program.
Over the last 2 years, entities including the Abu Dhabi Ports, Department of Economic Development, and also ALDAR have taken interest in the program as well. This goes to show that the ICV holds a lot of promise. In order to do business with these registered entities and reap the benefits of the ICV program, interested parties have to undergo ICV certification. This can be done by reaching out to ICV certifying bodies and availing their auditing services.
The ICV program has been progressing towards becoming a unified program. The unified ICV program shall make ICV certification more practical by enabling certificate holders to participate in the program with one ICV certification. By increasing the program’s practicality, more private entities will be attracted to the program, allowing for an increase in GDP and accelerating the rate at which core parts of the UAE’s supply chain become localized.
Areas Covered by ICV Certification
Currently, the following areas are covered by the ICV certification:
- Manufacturing of goods
- Revenue collected from outside the Emirates
- Contribution from Expats
- Investment growth
Enhancements Under Consideration
- IFRS Financials: financial documents used in order to obtain an ICV certificate must follow IFRS standards and have to be licensed by an auditor appointed by the Ministry of Economy.
- Governmental Authority Payments: all payments made to governmental bodies regulating free zones and entities licensed by the government shall be noted as 100% ICV.
- Branch Eligibility: multiple branches of an entity that exist in the same emirate with similar activities and are listed under the same ownership can be eligible for a single ICV certificate.
- Mainland Suppliers: any vendor who is based in the UAE’s mainland will be awarded a 10% ICV score by default.
- Owner’s Salary Credit: Emirati owners that are part of WPS can have their salaries included (capped at AED 120,000). Also, benefits and bonuses must be excluded from their salary before taking it into consideration.
- Certificate Expiry: the ICV certificate is valid for 14 months. The time period will be counted from the date on which audited financial statements or new financial statements are issued.
- Internal Costs: any internal cost (other than depreciation) must be excluded from calculations.
- Employee Headcount: employee headcount will not be counted per year-end. Instead, it shall be counted yearly (on average).
All considerations being made by the ICV program will help the UAE in growing its GDP and localizing its supply chain. In light of the pandemic, this shall help the Emirates in recovering its economy and preserving its best interests.
Companies looking to get ICV listing can approach us for the ICV audit. Our team will help you understand the process extremely well and help you prepare for the documents needed in the verification process.