In-country value certification (ICV) was implemented in the UAE in 2018, the program assists companies to engage in a fair competition of obtaining tenders according to the value they add to the UAE economy. ICV certification operates independently in line with statutory In-Country Value (ICV) guidelines and standards.
The Three main parameters that are used for ICV scoring are:
- Procurement by local supplier
- Hiring and training of the UAE Nationals.
- Localization of operations within the oil and gas industry.
How is ICV Calculated?
Manufacturing and Third-party costs
For Manufacturers within UAE
(Manufacturing costs incurred within the UAE + Emirati cost+60% of expat Cost)
____________________________________________________________
Total Cost
For Suppliers within UAE
Value of Purchase x ICV of the supplier + Emirati Costs+60% of Expat cost
_______________________________________________________
Total Cost
For Investments within UAE
25% of the total assets the company owns. The ICV Value increases with the increase in the net book value asset.
Net book value of assets within the UAE
_______________________________
Net book value
Emiratization
The basic is 2% and top up to the cost or up to AED 200,000 or up to 13%, which is more than AED 200,000 up to 20 million spent on the salary. Training and development of the Local U.A.E hires and donations to government universities and Sondooq Al Watan.
Expat Hire Contribution
The percentage of hired expat employees depends on the size of the company. This can range between 3% to 6% of the employee strength for Manufacturers and 7-10% for Service sector employers.
Bonus
A bonus is awarded for a minimum of 5% of revenue generated outside the country, the number of local Emiratis hired and the investment growth.
Total Revenue from outside the UAE Number of Emiratis Hired Growth in Net Book Value.
___________________________________+ ____________________ + _________________
Total Annual Revenue (Excluding re-exports) 100 Original Net Book Value
How to obtain an ADNOC ICV Certification in the UAE?
ADNOC highly benefits companies, actively develops the UAE economy and contributes to the three parameters mentioned above. It is essential to fulfilling the aforementioned prerequisites before completing ADNOC ICV Certification. Expert ICV consultants can conduct ICV evaluations, and the ICV Certifying bodies examine the following points.
- Local manufacturing
- Local procurement of third-party goods and services
- Hiring and development of UAE nationals
- Investing locally
- Expatriate contribution
- Generation of income from outside the UAE
The certifying bodies approved by ADNOC conduct the ICV certification to analyze, audit and prepare the financial statements according to ADNOC ICV requirements. The supplier must follow the following steps to attain the ADNOC ICV certification.
Get the IFRS-based Audited Financial statements
Companies ought to avail of expert audit services from accredited UAE auditors. If the company establishment is less than a year, the certifying body will use the management accounting financial statements for the certification process. Vendors and suppliers will use all the figures mentioned on the audited financial statements to complete the ICV submission template. The audited financials must not exceed two years from the certification date.
Fill out the ICV Submission Template
The ICV Template is a form provided by ADNOC supplier registration, where the ICV score is calculated. The ICV score calculation is different, based on the relevant parameters on the excel sheet.
- Fill in the general information on the ICV template–
- Company Name, Contact, and email
- Select the size of the company
- Year of the issued audited financial statements
- The type of business- Manufacturers or Service providers. In the case of both, companies must fill out separate forms for each will
- Complete the general questionnaire page.
- Fill in the questionnaire for goods manufacturers or service providers per the company’s relevant activity as per the audited financial statements.
- The investments page of the form includes information about the fixed assets, such as machinery, and property, for both manufacturers and service provider categories.
- The Emiratization page must be updated with the directly hired UAE National Staff, their training and development, and donations to local Sandooq Al Watan or government institutions.
- Similarly, information on the hiring and development of expats. The more the number of expat hiring directly affects the growth in ICV score percentage,
- Lastly, the Bonuses page in the template implies revenue inflow from outside UAE, growth in investments, and Emirati HeadCount.
Apply for an ADNOC ICV certification today
Based on the type of business, whether it is a manufacturer or service provider, the form is designed for the respective types to provide further information on the below five parameters. These parameters are linked directly to the ICV formula calculation. It is highly advisable to complete the ICV template with trusted and approved Audit Firms in Dubai to ensure efficiency and compliance to ICV regulations and standards. The certifying authorities verify the calculation against the actual financial statements, and it can be summarized as follows below:
- Investment
- Emiratization
- Expat Hiring
- Revenue within and outside UAE
- Bonus for Emirati Head Count, Investment Growth, & Revenue generated from outside the UAE
ICV Certificate UAE has a long standing and proven record of assisting multi companies with conducting expert ADNOC ICV Certification. So, get in touch with us today and we shall be happy to assist you.
