If you're a business looking to expand your operations and enter new markets, you may have come across the term ICV certification. ICV, or In-Country Value, is a certification program that measures a company's economic contribution to a particular country or region. It has become increasingly important in recent years, particularly in the Middle East, where governments and corporations are striving to promote local economic development and diversify their economies away from oil and gas.
In this beginner's guide, we'll explore what ICV certification is, why it matters, and how you can get certified.
What is ICV certification?
ICV certification is a way for businesses to demonstrate their economic contribution to the country or region where they operate. The program typically measures a company's expenditure on local goods and services, local employment, training and development of local talent, and investment in local infrastructure.
The specific ICV requirements vary depending on the country or region where it is implemented. For example, in the United Arab Emirates (UAE), the program is overseen by the Ministry of Economy and measures a company's spend on local goods and services, local employment, Emiratization (the hiring and development of UAE nationals), investment in research and development, and contribution to the UAE's non-oil economy.
Why is ICV certification important?
ICV certification has become increasingly important as governments and corporations seek to promote local economic development and diversify their economies away from oil and gas. In the UAE, for example, the government has set a target of increasing the contribution of the non-oil sector to the country's GDP from 70% to 80% by 2021.
ICV certification is also important for businesses looking to do business with governments or large corporations that require suppliers to meet certain ICV requirements. In the UAE, for instance, companies bidding for government contracts are required to have a minimum ICV score, and some large corporations have also started to require their suppliers to be ICV certified.
How to get ICV certified?
How can we get ICV certification? The process of getting ICV certified varies depending on the country or region where it is implemented. In the UAE, for example, the process involves the following steps:
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Register on the ICV certification portal: Businesses looking to get ICV certified in the UAE must first register on the ICV certification portal, which is run by the Ministry of Economy. The registration process involves providing basic information about the company, including its legal name, trade license number, and contact details.
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Submit financial statements: Companies must submit their audited financial statements for the previous year to the Ministry of Economy. The financial statements should be prepared in accordance with international accounting standards and should include a breakdown of the company's spend on local goods and services.
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Submit supplier invoices: Companies must also submit invoices from their local suppliers for the previous year. The invoices should be for goods and services that are directly related to the company's operations in the UAE.
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Submit employee data: Companies must submit data on their local employees, including their nationality, salary, and benefits. Companies must also provide details on any training and development programs they have implemented for their local employees.
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Submit R&D data: Companies must submit data on their investment in research and development in the UAE, including details on any patents or intellectual property they have developed in the country.
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Calculate ICV score: The Ministry of Economy will use the data provided by the company to calculate its ICV score. The score is calculated based on a formula that takes into account the company's spend on local goods and services, local employment, Emiratization, investment in R&D, and contribution to the non-oil economy.
