What is ICV Certificate?
ICV Certificate is a system generated digitally signed document issued by the Certifying Bodies empanelled by the Ministry of Industry and Advanced Technology (MoIAT). The ICV Certificate shows the ICV score of an entity which represents the contribution of that entity in the economy of UAE and in promoting Emiratisation in the private sector.
ICV Certification service is an Agreed-Upon Procedures (AuP) engagement which Certifying Bodies and MoIAT have agreed together that Certifying Bodies will issue AuP Report including ICV Certificate to companies who require ICV Certificate based on International Standards on Related Services (ISRS - 4400) after due verification of the company's records for below listed areas:
- Suppliers
- Staff including Emiratis and Expats cost and headcount
- Fixed assets and softwares
- Exports
Companies have to submit a filled ICV Template to their Certifying Body including details of above listed records. ICV Template is an excel workbook including predefined formulas that calculates ICV Score of the company based on filled records.
ICV Template contains parameters that apply to both Manufacturing companies holding Industrial license and Commercial companies holding non-industrial licenses. Requirements of the Suppliers section of the ICV template differentiate only between Manufacturing and Non-manufacturing companies. Rest of the areas listed above have similar requirements for both Manufacturing and Non-manufacturing companies.
Why ICV Cerificate Launch in UAE?
In-Country Value (ICV) program was introduced for:
- Improve the country's GDP by enhancing local supplies of goods and services and encouraging manufacturing facilities to be set up in the country.
- Promote Emiratisation in the private sector so the Emiratis get job opportunities in non-public entities as well.
- Bring investments into the country including both moveable and immovable assets and softwares.
- Encourage research and technological development activities within companies to keep pace with industry 4.0 revolution.
How ICV Certificate in UAE Helps Business?
ICV Certificate shows the score of a company that represents value addition by that company in the UAE. More the score mentioned in a company’s ICV Certificate, more chances to grab business opportunities from Government and Public as well as major companies in private sectors across all the Emirates of UAE.
The ICV Certificate in Abu Dhabi was the trigger point for companies based in Abu Dhabi to obtain the ICV Certificate as it was launched by ADNOC initially in 2018. Companies based in other Emirates of the UAE which were working directly or indirectly with ADNOC also spread the ICV Certificate in Dubai, Sharjah, Ajman, Ras Al Khaimah, Umm al Quwain and Fujairah.
At present, ICV Certificate in UAE is widespread across all the Emirates of the UAE, since all the Government Authorities are implementing the National ICV Program, therefore ICV Certificate is the need of businesses to sustain and carry on their business in the UAE market.
National In-Country Value Program Certificate Improvement Plan
The ICV Improvement Plan is a contractual commitment of ICV score over the years of contract that is awarded by Implementing Agencies of Government and Semi-government entities to their vendors.
When the terms of tender require, the company shall submit an ICV Improvement Plan along with the commercial bid that shows the company's ICV score to be achieved over the period of contract.
As implied from the name of ICV Improvement Plan, the score in the plan can only be in an upward trend irrespective of the percentage improvement in score is shown which can start even in decimal fractions. Hence, it is important for companies to mention that ICV score over the years of improvement plan which is realistic and achievable through underlying well documented forecasts and projections and at the same time score should be sufficient enough to win tenders.
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ICV improvement plan carries more weightage during bid evaluation compared to existing ICV Certificate. Therefore, even if a Company's ICV Certificate is showing good score, there is still chances to be on competitive disadvantage if the improvement plan will not be showing notable improvement in ICV score in subsequent years covering the contractual period.
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ICV implementing bodies have designated 5% of contract value as ICV milestone payment, that will be released on yearly basis to the extent of compliance with ICV Improvement Plan submitted with tenders. Therefore, any deficit in the actual score achieved vis-a-vis planned score will result in withholding of milestone payment to the extent the achieved score is less than the score mentioned in ICV Improvement Plan.
Types of ICV improvement plans
Two Types of improvement plan:
Company based Improvement Plan
Based on the overall company's financial statements relevant to those areas which are the subject of the ICV Template. Company based Improvement Plan Template is attached herewith for your ready reference.
Company Based Improvement Plan TemapleAgreement based Improvement Plan
Based on cash flows from activities pertaining to relevant contracts for which ICV Certificate is required separately. These improvement plans and respective ICV Certificate are normally related to particular high value EPC or construction projects.
To prepare Agreement Specific Improvement Plan and to obtain Agreement Specific ICV Certificate, the contractor has to maintain a separate book of Accounts for the Project capturing the spend pertaining to Project. This requires it to be audited at the end of the year by one of the approved Certifying Body. The Investment, Emirati and Expat sections of the ICV Template will be imported from the latest valid Company ICV certificate.
ICV Milestone Payment process:
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Total ICV Fee = 5% of contract amount Annual ICV Fee = Total ICV Fee / Duration of Agreement (Years)
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Annual ICV entitlement = Annual ICV Fee × Actual ICV Growth / Planned ICV Growth
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Company has to submit separate invoice at the end of each Agreement Year to claim Annual ICV entitlement.
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If a company meets the target ICV Score declared in ICV Improvement Plan in any subsequent year, the unpaid amount in previous years shall be released.
Pertinent Matters Of ICV Certification
ICV HISTORY
In November 2017, Abu Dhabi National Oil Company (“ADNOC”) introduced an In-Country Value (ICV) program. Subsequently, in 2019 and 2020, various Government and Semi-Government Entities (Implementing Bodies) joined hands with ADNOC to broaden ICV Program and launched the Unified ICV Program which requires that all their vendors are mandated to calculate and declare their ICV score based on audited financial statements, to be certified by one of an empaneled Certifying Body, for demonstrating how they are helping to deliver UAE Economy.
NATIONAL ICV PROGRAM
In 2021, the ICV program was shifted to Ministry of Industry and Advanced Technology (MOIAT) with the intention to make this program all-inclusive for Government and Semi-Government departments across whole UAE, to ensure the below objectives:
- Localisation of supply chain and development of industries.
- Bringing foreign direct investments.
- Creating job opportunities for Emiratis in private sector.
- Contributing to the country's GDP growth.
- Enhance spending on R&D activities and advanced technology.
WHO NEEDS AN ICV CERTIFICATE?
Companies working directly as suppliers or indirectly as sub-supplier with the Implementing Agencies of Government and Semi-government entities are required to acquire the ICV certificate. Vendors of Implementing Agencies who do not possess the ICV Certificate are allowed to participate in the tenders of Implementing Agencies, however, their ICV score will be considered as “Zero” in the bid evaluation and hence may be at a disadvantage to those holding ICV Certificates.
IMPLEMENTING AGENCIES
Below is the list of existing implementing agencies that are gradually increasing in numbers to ensure observing ICV Program across the country:
- ADNOC Group Companies
- Abu Dhabi Department of Economic Development
- Aldar Properties
- Abu Dhabi Ports
- Mubadala
- Etisalat
- Edge
- Etihad Rail
- Emirates Nuclear Energy Corporation
- Shurooq
- Masdar (Abu Dhabi Future Energy Company)
- Cyber Security Council
CERTIFYING BODIES
Ministry of Industry and Advanced Technology has approved specific firms (Certifying Bodies) for the auditing and issuance of the ICV Certificate. Currently, 21 Certifying Bodies are allowed to issue ICV certificates. Those Certifying Bodies are listed in below link:
https://moiat.gov.ae/en/open-data/icv-certifying-bodiesSALIENT BENEFITS TO OBTAIN ICV CERTIFICATE
- It opens entryways for your organization to gain contracts and projects from government/semi-government entities as well as major market players of UAE.
- The ICV Certificate allows organisations to participate in the bidding process of government/semi-government entities.
- ICV Score which is better than your competitors can assists you to be at better edge in bid evaluation process.
- ICV Certificate with best scoring in your particular industry would enhance your organization's general esteem.
- ICV program is being implemented across all UAE's government/semi-government entities, so having an ICV Certificate opens up vast opportunities for your business.
PRECONDITIONS TO OBTAIN ICV CERTIFICATE
To acquire the ICV Certificate, entities need to have IFRS complied audited financial statements, which should not be older than 2 years from the certification year.
For newly established Companies (less than 10 months old), who do not have audited financial statements, the Management Accounts for a period of up to 9 months can be used for ICV calculations. Any management accounts greater than 9 months will be required to be audited.
SPECIFIC REQUIREMENTS TO OBTAIN ICV CERTIFICATE
Each Entity holding separate trade license is subject to unique ICV Certificate, unless the entities are branches in same Emirate with common ownership and similar activities listed in trade license.
In-case of combined/consolidated audited financial statements, assets, liabilities, revenues and expenses of each entity reported should be split for ICV calculations of entity subject to ICV Certificate.
How FinXcel Stand As an Expert ICV Consultant
Being expert ICV Consultants we are well aware of the updated ICV Guidelines by Ministry of Industry and Advanced Technology (MOIAT) and have sound in-depth cognizance of pertinent dynamics that effect ICV Score in any business environment.
Our partners and staff are experienced in gigantic number of ICV engagements from Big Four, Top ten and leading regional Accounting Firms, right from the implementation of the ICV Program by ADNOC in March 2018, therefore we are an expert ICV Consultants with required level of knowledge and confidence to deal with any requirement of our clients with respect to arrangement of ICV Certificates, drafting of ICV Improvement Plan and implementation of ICV Program.
In addition to our expert ICV knowledge and experience, we go extra miles with our clients to stand out the competition by performing below activities during our service delivery:
- Preparing ICV template of our clients by ensuring that all the ICV score gaining areas are included in the template to achieve optimal ICV score that our clients are eligible to in accordance with ICV Guidelines.
- Making our clients understand about the parameters of ICV score and the determining factors that affect the ICV score in their particular business case.
- Prepare working files in a way to ensure seamless approval of our client's ICV Certificate.
- Ensuring that only relevant information is required that have notable effect on the ICV Score of our clients, to avoid unnecessary delays in gathering and verifying information.
FAQs
How to apply for ICV Certificate?
Follow the steps below for sending an ICV Quotation Request through the online portal.
Registration on the ICV Platform- Visit https://moiat.gov.ae/en/
- Click on Programs --- The National In-Country Value (ICV) Program --- Join Now
- Login through UAE Pass or register in the MOIAT “Single Sign On” (SSO) portal
- If your company doesn’t have an existing profile, please register your company through the “Register Company” button. (If you are joining an existing company, enter the invitation code received by email)
- Complete the company registration. Approval from MOIAT shall be completed within a maximum of 3 working days.
- Visit https://moiat.gov.ae/en/
- Login through UAE Pass or register in the MOIAT “Single Sign On” (SSO) portal.
- You will then be redirected to ICV Platform’s “Main Page”.
- Click on the “Bidding Process” tab.
- To initiate a new bidding process, click on the “Select CBS” button.
- Select from the provided list of Certifying Bodies those you would like to receive offers from then fill out the questionnaire.
- Fill out the questionnaire based on your company details then click on “Request Quote”. Certifying Bodies will receive your company details and then provide the price quotation based on that. You can then either Accept, Counteroffer, or Reject the Certifying Body’s offer accordingly. Upon accepting one of the offered quotations, all other offers will be rejected.
- Your selected Certifying Body will then upload a signed copy of the engagement letter in the “Engagement Letter” tab.
- Once the upload is completed, you will then be able to proceed with populating the ICV certificate information.
- Fill out the draft version which then shall be Reviewed, Endorsed, Signed, and Approved by the Certifying Body.
What are the objectives of ICV?
ICV Certificate is required to be considered favourably in the tenders of Participating Entities who are Implementing Bodies of the National ICV Program. Customers also require ICV Certificate to improve their ICV Score usually if they are holding Non-Industrial Licenses.
What are the objectives of ICV?
ICV Certificate is required to be considered favorably in the tenders of Participating Entities who are Implementing Bodies of the National ICV Program. Customers also require an ICV Certificate to improve their ICV Score usually if they are holding Non-Industrial Licenses.
Who needs ICV in UAE?
Companies working directly as suppliers or indirectly as sub-supplier with the Implementing Agencies of Government and Semi-government entities are required to acquire the ICV certificate. Vendors of Implementing Agencies who do not possess the ICV Certificate are allowed to participate in the tenders of Implementing Agencies, however, their ICV score will be considered as “Zero” in the bid evaluation and hence may be at a disadvantage to those holding ICV Certificates.
How much does it cost to get ICV certified?
Cost varies with the company size and factors pertinent to ICV Certification scope of work. However, the minimum fee reasonably being charged is AED 4,000 for Non-Industrial License holding companies and AED 5,000 for Industrial License holding companies.
What does ICV mean in supply chain?
ICV Score is directly proportional to ICV spending by a company. More the spending on ICV Certified suppliers, investments, and Staff particularly Emirates, more ICV Score is expected to be achieved.
Why do we need an ICV certificate?
ICV Certificate is required to be considered favorable in the tenders of Participating Entities who are Implementing Bodies of the National ICV Program. Customers also require ICV Certificate to improve their ICV Score usually if they are holding Non-Industrial Licenses.
