The National In-Country Value (ICV) Certification Program is a strategic initiative by the Ministry of Industry and Advanced Technology to promote local industries and support local companies in advancing economic and social development. The ICV certificate UAE is awarded to suppliers who contribute to the local economy, and it gives them an advantage during the award of contracts and purchases based on their ICV score. In this article, we will discuss the ICV certification for startups and what entrepreneurs need to know.
ICV Calculation UAE
ICV certification is a process that evaluates the contribution of a supplier to the local economy. It captures the total amounts spent inside the country on manufacturing, local products and services, investments, and the hiring and development of Emiratis. The ICV score is calculated based on the following factors:
- Goods manufacturing cost (for startups that are goods manufacturers)
- Third-Party Spend Cost (for startups that are service providers)
- Investment in UAE
- Emiratization
- Expatriate contribution
- Bonus (Revenue from outside UAE, Emirati Head counts & Investment Growth)
Benefits of ICV Certificate UAE for Startups
ICV certificate UAE is crucial for startups in the UAE for several reasons, offering various benefits that contribute to their growth and success. Some of these benefits include:
- Competitive Edge in Tenders: ICV certificate UAE provides a competitive advantage when bidding for government contracts and tenders, as it can lead to a higher score in the bidding process.
- Attracting Investments: The accreditation helps startups attract investments, diversify the economy, and increase GDP and exports, contributing to the overall growth of the UAE’s economy.
- Job Creation: The ICV program encourages the employment of Emiratis in the private sector, creating job opportunities for locals and enhancing the country’s human capital.
- Local Industry Growth: ICV certificate UAE contributes to the growth of local industries by reducing dependence on imports and financing incentives, promoting economic diversification and sustainable growth.
- Enhanced Market Opportunities: ICV certification provides startups with increased credibility and competitiveness, opening doors to new business prospects and partnerships.
- Stakeholder Trust and Business Prospects: It serves as a symbol of commitment, honesty, and integrity, fostering trust and amplifying business opportunities for startups.
- Compliance and Recognition: ICV certification allows startups to demonstrate their commitment to local economic development, leading to recognition and potential business advantages.
How Startups Can Get ICV Certified
The process for startups and SMEs to obtain ICV certification involves the following steps:
- Register as a supplier on the MOIAT website: Create a supplier profile with basic company details.
- Prepare required documents: This includes the latest audited financial statements (or interim financials if a new business) and documents proving company ownership/incorporation.
- Download ICV Certificate Template: This Excel file contains different tabs to input financial and operational data.
- Fill out the template: Enter figures from the financial statements under sections like revenue, investments, staff details, etc. Calculate the ICV percentage score.
- Submit the application: E-sign and stamp the completed template. Submit along with documents to an authorized ICV certifying body.
- Verification and issuance: The certifying body will verify the application and issue the ICV certificate UAE if approved. This process usually takes 2-4 weeks.
- Renew annually: Certification must be renewed each year by resubmitting updated financial information before the 14-month validity expires.
Key Considerations for Startups
While the certification process aims to be straightforward, startups need to keep some points in mind:
- The ICV certificate UAE shall be obtained for each legal entity of the supplier that intends to be certified. Each license of a company is considered an independent legal entity even if the ownership is the same. However, if a company has different branches in the same Emirate with identical activities and ownership listed on the licenses, then one combined ICV certificate will be issued for the company in that Emirate.
- All figures entered in the ICV certificate template should tally with the supplier’s latest audited financial statements. The audited financial statements shall be as per the International Financial Reporting Standards (IFRS), and 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.
- The ICV certificate UAE shall be valid for 14 months from the date of issuance of Audited Financial Statements. Suppliers can get recertified during the validity of the ICV certificate if they choose to, using the same audited financial statements, but the validity of 14 months from the first issue will remain.
- Upon appointing an Empaneled Certifying Body, the supplier shall not change the Empaneled Certifying Body for that year’s ICV certificate UAE without proper justifications.
Conclusion:
In conclusion, ICV certification is an essential requirement for startups as obtaining an ICV Certificate UAE can greatly enhance a company’s chances of winning tenders and contracts with government entities and large corporations. However, the application process can be complex and time-consuming. Seeking the guidance of experienced ICV Certificate consultants in the UAE can help ensure a smooth and successful application process. These consultants are well-versed in the latest regulations and requirements and can provide valuable insights and advice on how to maximize your ICV score.
Read More: ICV Process and Requirements in the UAE
