ICV Requirements in UAE Small and Medium Sized Enterprises
ICV implementation constitutes a range of guidelines and regulations that target the propagation of local economic development by increasing the contribution of SMEs and local businesses to various industries. Navigating ICV requirements can be a complex task, but with the right knowledge and strategies, SMEs can thrive. This article explains some key ways in which SMEs can use the ICV certification UAE to grow in the UAE.
The ICV program is intended to increase the commercial performance level and support the local producers by requiring companies to localize their supplies more and giving preference to domestic material and services. Certification under the National ICV program affirms companies’ commitment in developing the local economy in terms of manufacturing locally, Investments, and Emiratization.
Some key benefits SMEs can gain from ICV certification include:
To apply for ICV certification, SMEs need to follow these basic steps:
Annual financial statements prepared by the company or its auditor according to International Financial Reporting Standards for the financial period ended in the previous calendar year. Submission of filled ICV reporting template that contains information regarding local procurement, investment, employment etc.
SMEs need to engage certifying firms accredited by MOIAT to issue ICV certificate.
Compile the documents and apply for certification by submitting the documents and a fee to the certifying authority.
The certifying body will also cross-check the data, perform the audit, and determine the final ICV score. Once cleared, the certificate will be provided to the candidate.
It should be noted that the validity of ICV certificates is 14 months. SMEs have to continue to provide reports at regular intervals and also renew their certification to remain accredited suppliers.
The ICV score is calculated based on the following components and their weights:
| Component | Weightage |
|---|---|
| Manufacturing Cost & Third Party Spend | 50% |
| Investment | 25% |
| Emiratization (hiring UAE nationals) | 15% |
| Expat contribution | 10% |
| Bonus 1 (outside UAE revenue, Emirati headcount, investment growth) | 5% |
| Bonus 2 (participation in ITTI) | 5% |
The first step for SMEs is to familiarize themselves with the ICV framework and guidelines established by the UAE government. ICV requirements can vary across industries, and it is crucial to fully understand the specific requirements that apply to one’s particular industry.
The essential components of ICV include:
The next step after fully understanding ICV regulations is for SMEs to conduct a gap analysis to assess their company’s status regarding ICV protocol. The company may benefit from identifying areas that need improvement and creating clear strategies for progress. Such an analysis aims to help clarify one’s direction and aid in the development of concise, realistic long and short-term goals.
Additionally, SMEs should seek advantageous local partnerships. Local partnerships significantly boost a company’s ICV score and establish strong relationships with local businesses enhancing business resilience and sustainability within the UAE market.
Emiratization is a crucial component of ICV, and hiring and training UAE nationals is essential for long-term business growth. SMEs may find it useful to invest their capital in programs that promote the development and employment of UAE citizens. The result increases ICV scores as well as improvement of brand image and development of local trust.
To further increase ICV scores, SMEs should invest in technical research and development, technology adoption, and innovation. These investments contribute to meeting ICV targets and also make SME set-ups globally competitive and internally robust in the long run.
Read more: Process of obtaining ICV Certification
Workforces utilized by SMEs are one of the key drivers of business productivity and long-term economic growth. The knowledge and mindset of a company’s workforce dictate the extent of its creativity, efficacy, and platform for improvement. Therefore, SMEs are advised to educate both employees and customers about ICV requirements and encourage their participation to create an effect of standard trade practices.
SMEs may also benefit from working out an effective compliance management system to track and report their progress toward meeting ICV requirements. This involves ensuring that financial records, procurement processes, and human resource practices all align with ICV protocol.
Read more: Importance of ICV Certification for Businesses in the UAE
As aforementioned, the UAE government offers a range of incentives and support programs for SMEs to help them align easily with ICV requirements. SMEs are advised to take advantage of various government incentives e.g. grants, subsidies and training, as these have long-term returns in the form of capital development and skill enhancement within SMEs.
ICV requirements continually change to adapt to the dynamics of the global market. Thus, SMEs may greatly benefit from keeping requisite records of their progress over time, performing regular re-evaluations of short-term goals, and adapting their strategies as required. Continuous improvement is necessary to maintain compliance and benefit from ICV certification.
Moreover, SMEs may find it beneficial to keep in touch with the latest industry events, conferences, and networking opportunities with major stakeholders. Building strong relationships within your industry rarely goes amiss.
Navigating ICV requirements for SMEs in the UAE presents significant opportunities for growth and sustainability. By understanding the ICV framework, conducting a thorough gap analysis, building local partnerships, and investing in key areas such as Emiratization and technology, SMEs can meet ICV requirements and thrive. Conscious monitoring, regulated compliance management, and professional guidance will help ensure long-term success in adhering to ICV regulations. Thus, it is advisable for businesses to seek the expert services of trusted ICV Consultants in UAE to seamlessly meet ICV requirements. Therefore, contact us today and we shall be glad to assist you.