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Is the ICV certificate mandatory in the UAE?

The In-country Value Certification program was implemented in the UAE for companies to benefit from sourcing locally. An ICV-certified company will have up to 40% leverage in the bidding process.

Five attributes for calculating the ICV score are 

  1. Goods Manufacturing costs or third-party costs (in the case of the service provider)
  2. Investment in the UAE
  3. Emiratization costs (Hiring, training and development of UAE Locals)
  4. Expat contributing (Hiring from the expat talent pool in the UAE)
  5. Bonus (Revenue generated outside the UAE, total UAE citizens hired and growth in investments

The supplier category is divided into Good manufacturers and Service providers. Suppose you are a company with an industrial trade license. In that case, you will be considered a good manufacturer, and the goods manufacturing attributes of the ICV certifications will apply to your company. 

On the other hand, if you are a service provider, then the ICV certifying body will consider Third Party costs. The ICV certification score is calculated based on the relevant activity of the business and the business types: the goods manufacturer or service provider.

The above costs will be considered in terms of percentage while calculating the ICV score. So even if the company is small or medium-sized, the percentage contribution allows them to participate at par with large companies during the bidding process.

Business Costs that can make you eligible for an ICV Certificate

 There are more than five thousand companies in the UAE that are ICV Certified. The government of UAE plans to outsource 50% of the government spending locally within the UAE. It is a matter of time before companies will start bidding for these outsourced projects. The ICV Certification will become a norm for businesses wanting to participate in the tenders bidding process.

If you are a goods manufacturer and source your items locally, you are eligible for a higher ICV score. Several companies in the UAE hire locally and procure locally to gain a better ICV score. Service provider’s contribution towards the following services as

  • Payment toward electricity and water services 
  • Fuel Consumption
  • Rent paid for property or land
  • Fees towards telecom provider
  • Government fees paid directly to the relevant authorities
  • Fees paid to Free zone authorities

You can seek consultation from ICV Certificate UAE, the industry expert auditors in the UAE, for more than three decades. 

Read more: Purpose of ICV Certification in the UAE

What are the drawbacks of not having an ICV Certificate?

  • Unable to ultimately be a part of the growing economy

 The UAE economy has evolved and is growing exponentially. Various programs were launched as a part of Project 50, In Country Value Certification being one of them. The certification is a recognition of the companies that not only run their business in the UAE but also benefit several aspects of the economy by investing mainly in the local markets. Since the government of UAE is planning to outsource almost 50% of its operation in the local market, it will increasingly become essential to have an ICV Certification in the future.

  • Loss of year-on-year credentials

Companies already participating in the bidding process with ICV scores and certificates will be much more experienced than companies that have delayed getting ICV certified. After winning bids through ICV score, companies can enter the participating companies’ database as potential suppliers with ICV certification. Hence sooner companies bid with ICV certification increases their chances to win even more bids in future.

  • Cannot gain from the 40% weightage leverage in the ICV Evaluation

Commercial evaluation for companies that do not have the ICV certification remains zero. Where companies with the ICV Certificate can get up to 40% leveraged weightage in the ICV Score calculation, companies can participate in the tender bidding process without the ICV Certificate. Still, the chances are lowered due to companies participating with the ICV Certification.

Read More: A complete guide for ICV Certification requirements

  • Non-eligible for future advantages provided by the government

ICV Certificate is one of the advantages that the government provides for companies that invest locally. Several other benefits are in line as the country gears to start the operation 300Bn project in the UAE by creating potential business hubs for companies and investors. The aim is to increase the count of ICV-certified companies and outsource possible government operations to these companies. 

  • You may lose potential bids

ICV Certification brings an advantage in the bidding process for tenders given out by the participating entities. We cannot speculate that there will be a higher weightage for companies that are ICV-certified. It is a loss as businesses can seize this opportunity just by applying for the ICV certificate. If you feel uncertain or have questions regarding the ICV certification, you can contact us. They can provide you with more information on the ICV certification benefits and how you can apply for the certificate.

Summary

It is advisable to seek expert consultation for ICV certificate registration in the UAE. Consult ICV Certificate UAE. today for ICV certification guidance and we shall be glad to assist you in combating any probable intricacy.

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