The United Arab Emirates has unveiled several initiatives to support domestic businesses and enhance autonomy in its economy. The In-Country Value (ICV) Certification program is one such initiative that encourages companies to maximize their local investments and Emirati recruitment and contribute to the economic development of the UAE. By completing their ICV certification requirements, businesses can enhance their credibility, foster growth, and access new opportunities in the UAE marketplace.
This comprehensive guide will help you understand ICV certification in the UAE, what its benefits are, what the basic compliance requirements are, and how you can obtain this essential document.
What is ICV Certification in the UAE?
ICV (In-Country Value) refers to the total economic contribution made by a company within the UAE. Hence, to recognize this contribution to the nation’s economy, the UAE authorities issue an ICV certificate as evidence of the company’s efforts to invest in the development of the country.
The key bodies that play a vital role in the ICV Certification program UAE include:
- Department of Economic Development (DED): A major government body that implements various economic initiatives and promotes economic development.
- Dubai Energy and Water Authority (DEWA): A key player in the energy and water sector that encourages ICV compliance within the sector.
- Abu Dhabi National Oil Company (ADNOC) Group: Major player in the energy sector that is known to be a forerunner in implementing the ICV program.
- Dubai Multi Commodities Centre (DMCC): Supports the ICV initiative by promoting the growth of local industries and businesses.
- Dubai Petroleum Establishment (DPE): Produces hydrocarbons within the Emirate of Dubai.
Overall, the ICV Certification program symbolizes the UAE’s commitment to strengthening the economy from within and evaluating a company’s contribution through local spending, Emirati employment, and local supplies.
Key requirements for the ICV Certificate UAE
The basic ICV certification requirements include the following:
- Local Spending: Businesses must show their commitment to spending a certain share of their budget on goods and services from local suppliers.
- Investment: Businesses must make considerable investment in the UAE by establishing operations, conducting research and development, or partnering with local companies.
- Emiratization: Businesses must hire Emirati employees and contribute to the UAE’s workforce.
- Technology Transfer: Companies need to transfer advanced technologies and knowledge by training local employees and partnering with local institutions.
Benefits of ICV certification services UAE for foreign businesses
ICV Certification holds a special place in the UAE, bringing forth a variety of advantages -
- Uplifting Market Standing: Elevates the status of the company to an esteemed position in the market and serves as a tangible testimony of its commitment to profitability in the UAE’s competitive market and all-encompassing growth of the economy.
- Building Shareholder Trust: An epitome of transparency, integrity, and dedication that signals the company’s investment in transparency, ethical practices, and local empowerment, helping them gain trust and build relationships.
- Amplifying Business Opportunities: Elevates businesses to new heights and aligns them perfectly with the UAE’s vision of fostering local enterprises, thereby making them more appealing and eligible for government collaborations.
- Enhancing Reputation: Reflects a company’s economic commitment and embrace of corporate social responsibility, drawing customers and potential employees who are aligned with its ethos.
- Gaining Competitive Edge: Aids companies in market differentiation, rendering a preferred choice for collaborations, contracts, and partnerships.
Overall, the ICV certification UAE is a strategic move worth considering.
ICV certification requirements for foreign businesses
Foreign businesses are required to fulfill certain ICV certification requirements, which include:
1. Company General Information
The supplier must fill out the following details in the Company General Information section of the ICV Certificate Template:
- Company name as mentioned in the business license
- Business license number
- Address as specified in the license
- Details of the contact person (Name, E-mail, Office Tel number, Mobile number)
- Company Type (e.g., SME, Non-SME, International Company)
- Origin of the company (Domestic or International)
- End date of the financial year
- Issue date of the audited financial statements
- Company Business (Goods Manufacturer, Service Provider)
2. In-Country Value Details
The In-Country Value details include information about goods manufacturing, third-party cost, investment, Emiratization, expatriate contribution, and bonus.
3. Registration and Documentation
The supplier is required to register in the Tawteen Club portal, a platform for local job seekers and employers, and provide all documents supporting the reported cost figures, and ensure that the figures tally with the latest audited financial statements.
4. Consistency and Compliance
The figures reported in the template must align with the latest audited financial statements of the supplier, which should be prepared as per the International Financial Reporting Standards (IFRS) and should not be older than 2 years from the year of certification. Newly established companies can use management accounts for up to 9 months for ICV calculations.
Steps involved in obtaining an ICV Certificate in the UAE
ICV certification requirements include a series of steps pertaining to compliance with the stipulated criteria. Here’s an overview of the process:-
1. Step 1. Determine Eligibility
The process begins with determining the company’s eligibility for ICV certification. Companies that partake in procurement activities or participate in tendering for government contracts are typically eligible for this program.
2. Step 2. Gather Required Documentation
Once the eligibility is confirmed, collect all documents, including the financial reports, tax documents, employment supporting documents of Emiratis, a list of local vendors, and a description of investments or partnerships in the UAE. The specific documentation may differ based on the size and structure of the company. However, it is crucial to be well-prepared with the general ICV Certification requirements.
3. Step 3. Evaluate your National Labels
At this stage, evaluate the company’s in-country contributions, such as spending on local suppliers, the number of Emiratis employed, and other critical indicators to determine the actual ICV score UAE.
Step 4. Submit the Application
Once all the documents are prepared, apply for the ICV certification through an authorized ICV certifying body that will assess the documents and the company’s performance against ICV criteria.
Step 5. ICV Assessment Process
The certifying body will conduct an in-depth assessment of the company’s operations and review its financial records, local procurement activity, employment practices, and local community investment. This will help the certifying body verify whether the company is compliant with the ICV requirements and is in the greater interest of the UAE’s economy.
Step 6. Receive ICV Score
After successful completion of the assessment, the company will receive an ICV score based on its contributions to the UAE’s economy, such as local spending, the employment of UAE nationals, investments, and local purchases within the region. The higher the score, the greater the contribution to the local economy.
Step 7. Obtain the ICV Certificate
If the business meets the necessary criteria, the authorities will grant the company an ICV certificate that will typically last for 12 months, following which it has to repeat the certification process.
ICV certification requirements: ICV score calculation UAE
The following factors play a central role in calculating the ICV score in the UAE -
1. Local Procurement: The share or value of goods and services sourced from local suppliers. The greater the local estate sourcing, the higher the ICV score.
2. Employment of UAE nationals: The number of UAE nationals employed by the company. The higher the number of Emiratis employed, the higher the score.
3. Direct Investment: Direct investments made in the UAE, such as capital investments, infrastructure, and joint ventures with local companies.
4. R&D and Innovation: Investment in research and development, with a prime focus on innovation and developing new home-grown products.
Thus, the ICV certifying body can calculate the ICV score of the company through these factors, specifying their contribution in strengthening the UAE’s objective to diversify its economy.
How our tax consultants can help
Thus, completing the ICV certification requirements is not just a requirement but a strategic move to pave the way for increased opportunities, partnerships, and sustainable growth in the UAE. If you are looking for a suitable partner to guide you through the ICV Certification process, it is advisable to connect with our tax experts, who will make this entire process smooth and hassle-free for you and drive success for your business in the UAE marketplace.
Contact our tax consultants and learn more about our ICV certification services UAE.
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