How to Maximize Your ICV Score as a Supplier in the UAE

The In-Country Value (ICV) system; introduced by the UAE Government, is a calculated initiative to encourage local economic growth, magnify the inclusion of Emirati nationals in the workforce, and assist the development of local industries. Companies situated in the UAE are emphasizing on elevating their ICV scores to leverage competition in government contracts and chances to work with successful businesses. Gaining a higher ICV score raises the industry reputation of a business and facilitates sustainable economic development.

What is ICV?

The major idea behind the ICV program by UAE government is to strengthen the economy through diversity and inclusion of UAE nationals in the businesses. The businesses working inside the UAE are evaluated on the basis of different parameters that are promising for sustainable economic growth. Major goals that the government want to achieve through ICV are limited dependency on imported goods, emiratization in businesses and investment in local businesses. Those who score high on ICV score are preferred by the government for contracts and tenders from big companies. 

ICV Calculation and Requirements

According to UAE Ministry of Industry and Advanced Technology, the ICV for different businesses can be calculated through these formulas: 

• Goods Manufacturer ICV Score

 (Manufacturing cost incurred in UAE + Emirati Cost + 60% of Expat Cost) / (Total Cost)

• Service Providers

((Value of Purchase x ICV of supplier) + Emirati Cost + 60% of Expat Cost) / (Total Cost)

The basic requirements in order to get ICV score include audit done by ICV auditors, local procurements in business, employees compositions, financial investments in assets, and efforts made for corporate social responsibility. The ICV certification is valid for one year and it has to be renewed every year. 

Tips to Improve ICV Score

Businesses should focus on certain potential areas that are required to attain a high ICV Score. Following are few of them:

1. Focus on local procurement: look for suppliers that are UAE-based aligning with the business need and build strong partnership with them. When businesses prioritize local procurement for raw materials and logistics, it not only add into the economy of the country but also increase the ICV score.
2. Emiratization: local procurement and emiratization constitutes the highest weightage i.e., 30% of the total ICV Scoring. Focusing on hiring the UAE nationals and providing them job opportunities show your dedication towards UAE working class development. Businesses can initiate training and mentorship for the UAE nationals for their career development.
3. Spend in Fixed Assets: businesses should focus on showing their physical processes within the UAE by establishing warehouses, gaining equipment’s and facilities inside the UAE. As technology is the major focus for the world now, so for business in UAE should also invest in developing state of the art tech to support their tasks.
4. Contribution towards local subcontractors: for small or large contracts and tenders, contact and develop partnership with the UAE based businesses providing specific services like construction, maintenance  and logistics etc. keeping long term partnership with the locals enhances the reliability and increased ICV score. This is in accordance with the core goal of UAE government i.e., sustainable local economic growth.
5. Corporate Social Responsibility: CSR id very important factor for any business in the world now as it shows their commitment and dedication towards the social development of any state along with the economic development. UAE has high focus on CSR and expects any businesses working in the country to invest in different humanitarian projects like education, healthcare, climate sustainability and community work. Volunteer initiatives engaging locals that benefit them the most are encouraged.
6. Research and Development (R&D) based projects: bringing tech to UAE has the potential to increase ICV score. Businesses can improve their ICV via investing a portion of their finances for innovation, research and development projects that can lead to better advancements. For that matter, collaboration with educational institutions and research think tanks for the better flow of knowledge and skills.

Weightage to Key areas:

In addition to the main score, the above-mentioned key areas have a certain defined weight that counts significantly on the overall ICV score. 

1. Focus on local procurement and Suppliers 30%
2. Emiratization 30%
3. Spend in Fixed Assets 15%
4. Corporate Social Responsibility 10%
5. Research and Development (R&D) based projects 15%

Enhancing the ICV score for a business in the UAE demands a comprehensive approach that focuses on local procurement and suppliers, Emiratization, spending on fixed assets, and community engagement. Businesses can improve their potential to gain government contracts and contribute to the UAE’s long-term economic growth by focusing on such areas. The ICV certification is not only a factor for enhancing competitiveness but also an essential part of the UAE’s vision for a diversified and sustainable economy. As businesses continue to invest in the local economy and workforce, they play an important role in the success of the UAE.

Read More: Maximizing ICV Benefits: Strategies for UAE Suppliers and Contractors