Free Zone and Mainland companies are not scored on a level playing field by default. UAE mainland vendors get an automatic baseline 10% ICV score, even if they never certify. Free Zone and foreign vendors default to 0% unless they get certified through a MoIAT-approved certifying body.
This guide explains how that scoring gap works, why it matters in tenders, and what Free Zone companies can do to close it.
The Automatic Score Asymmetry: 10% vs. 0%
The asymmetry sits inside the Third-Party Spend component of the ICV formula. This is the part of the calculation that scores how much of a buyer’s own ICV score comes from its suppliers.
Per MoIAT’s official National ICV Certification Guidelines for Suppliers, Section 5.4 (Third Party Cost), the rule is stated directly:
“For the purpose of ICV calculation only, a vendor who is based in UAE mainland will be automatically granted 10% ICV score. For all other vendors, the ICV score shall be considered as zero (0) if they do not have valid ICV certificate.”
| Vendor type | Without ICV certificate | With ICV certificate |
|---|
| UAE mainland company | 10% baseline | Actual certified ICV score |
| Free Zone company | 0% | Actual certified ICV score |
| Foreign supplier | 0% | Actual certified ICV score, if eligible |
Two companies can offer the identical product at the identical price. A buyer running its own ICV calculation will still score them completely differently, based only on where each one is licensed.
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Why This Matters for Free Zone Companies Bidding on Tenders
Participating entities, including ADNOC, government departments, Aldar, and Mubadala, don’t just look at a bidder’s own ICV score. Buyers are also trying to protect their own score, and every dirham they spend with an uncertified Free Zone vendor pulls that score down to zero for that line item.
In practice, this creates a real disadvantage at the exact moment it matters most: the sourcing decision.
- A mainland vendor with no certificate still contributes a 10% floor to the buyer’s score.
- A Free Zone vendor with no certificate contributes nothing.
- When two bids are otherwise comparable, the buyer has a direct, formula-driven reason to award the contract to whichever vendor protects their own score.
For a Free Zone business competing on price and quality alone, that’s an invisible handicap sitting under every evaluation. Certification is the only way to remove it.
No Restriction on Free Zone Entities Certifying
No rule bars Free Zone companies from getting ICV certified. The program covers any legal entity supplying goods or services to a participating entity, directly or through the supply chain.
- No restriction by license type. Trading, service, professional, and industrial Free Zone licenses are all eligible.
- No restriction by ownership nationality. 100% foreign-owned Free Zone entities certify under the same rules as anyone else.
- No exemption carved out for Free Zone status. A Free Zone entity is assessed against the same standardized MoIAT ICV formula as a mainland company.
There is one structural difference worth knowing, and it’s set out directly in MoIAT’s guidelines. Free Zone companies are classified for ICV purposes by license type: a Free Zone entity holding an Industrial License (a Goods Manufacturer) is treated as “Within UAE” across the formula, while a Free Zone Service Provider is classified as “Outside UAE” for company-based reporting, and its Investment component specifically is excluded from the “within UAE” calculation.
That has two knock-on effects for Free Zone service providers, per the same guidelines:
- The Investment Growth bonus is based on growth in UAE-based asset value. If Investment isn’t counted as within UAE, there’s no UAE asset value to grow against.
- The revenue-from-outside-UAE bonus is only available to legal entities classified as based within the UAE, which excludes Free Zone Service Providers under this classification rule.
This affects the ceiling on the score, not eligibility to certify. A Free Zone company with an Industrial License doesn’t face this limitation.
What Closes the Gap for Free Zone Companies
The certification process and document requirements are the same for every applicant, Free Zone or mainland: audited financial statements, supplier and payroll records, and submission through a MoIAT-authorized certifying body. Our step-by-step guide to calculating your ICV score walks through that process in full.
What’s specific to a Free Zone applicant is making sure the Free Zone trade license and any onshore activity are correctly reflected in the submission. A Free Zone entity’s licensed scope can differ from a mainland one, so this step matters more here than it does for a straightforward mainland applicant.
Each license is also treated as its own legal entity. A Free Zone company holding multiple licenses generally needs a separate ICV certificate for each one, unless branches share the same emirate, ownership, and licensed activity.
Once certified, the score is valid for 14 months from the date of the audited financial statements, the same validity period as a mainland company.
Our team can help Free Zone companies prepare the documents, coordinate with an approved certifying body, and complete the ICV certification process in Dubai and UAE.
The Bottom Line
For a Free Zone supplier, ICV certification isn’t a nice-to-have. It decides whether you start a tender evaluation at 0% or at a real, competitive score. A mainland competitor gets a 10% floor by default. A Free Zone company gets nothing until it certifies. If you want to compete on equal footing for ADNOC, government, or participating-entity contracts, certification is the only way out of the automatic zero.
FAQs
Does a Free Zone company automatically get any ICV score without certifying?
No. Free Zone and foreign vendors are scored at 0% for the third-party spend component unless certified. Only UAE mainland vendors get an automatic 10% baseline without certifying.
Can a 100% foreign-owned Free Zone company still get ICV certified?
Yes. There’s no restriction based on ownership nationality or license type. Any Free Zone entity supplying a participating entity, directly or through the supply chain, can apply.
Does Free Zone status limit how high an ICV score can go?
It can, depending on license type. Free Zone Service Providers are excluded from the Investment component and its related bonuses, unlike Free Zone companies with an Industrial License. This affects the ceiling on the score, not eligibility to certify.
How long is an ICV certificate valid for a Free Zone company?
14 months from the date of the audited financial statements used in the application, the same validity period that applies to mainland companies.
Author: M. A. Farahat – ACPA, CFE, CICA
Research and Publications Department
ICV Certificate UAE
United Arab Emirates
Tel: +971 4 2500251
Email: [email protected]
