In National In-country value (ICV) certification is an important process for companies operating in the UAE. ICV aims to improve the performance and sustainability of the industrial sector by increasing the contribution of local industries and supporting local companies. Obtaining ICV certification demonstrates a company’s commitment to contributing to the UAE’s economic and social development goals. Companies need to stay up to date on the latest ICV certification requirements to ensure they are maximizing their ICV score and meeting their obligations.
Recent Updates in ICV Certification
The Ministry of Industry and Advanced Technology (MOIAT) in the UAE has recently announced some important updates to the requirements for In-Country Value (ICV) certification for suppliers doing business in the Emirates. As the regulatory body overseeing the National ICV Program, MOIAT aims to continuously improve and strengthen the program to better support local economic growth and development. It is crucial for all suppliers to stay informed of any changes to ensure smooth certification and compliance.
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Key Changes in Eligibility and Scope
One of the major changes introduced is the expansion of company types and locations that are now eligible to apply for ICV certification. Previously, only companies with a legal entity registered in the UAE were eligible. However, the scope has been widened to also include foreign companies that have a branch or representative office in the UAE, in addition to Free Zone companies. This aims to encourage more international businesses to invest and establish a presence locally.
Another key update is that the scope of ICV calculation has been expanded. In addition to considering in-country value for goods manufacturers, the contributions of service providers are now also taken into account. Attributes like employment of Emiratis, training investments, and procurement from local suppliers will be evaluated for service companies under revised guidelines.
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New Requirements for Documentation
MOIAT has also introduced some changes in the documentation required for ICV certification. One of the new requirements is that audited financial statements submitted should not be more than 10 months old. Previously, statements up to 2 years old were accepted. This ensures more accurate and up-to-date financial information is reflected.
Suppliers are also now required to separately capture specific ICV-related costs like Emirati payroll, training expenses, and local procurement in their book of accounts for ease of reporting and verification during audits. Clear segregation of such figures will facilitate a smoother certification process.
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Key Changes to the ICV Calculation Formula
The Ministry of Industry and Advanced Technology (MOIAT) recently announced updates to the formula used to calculate a company’s ICV score. Some of the key changes companies need to be aware of include:
- Investment in the UAE now receives a higher weighting of 15% on a progressive basis from Asset Net Book Value of AED 5 million to AED 150 million, compared to the previous 10% flat rate.
- Revenue from outside the UAE now provides a bonus of up to 5% of the total ICV score, encouraging companies to export their products and services internationally.
- The bonus for the Emirati headcount has been increased to 5% to further incentivize the employment and training of Emirati nationals.
- Expat contribution now uses a tiered system with higher ICV percentages awarded based on the number of expats employed to recognize larger-scale operations.
Being aware of revisions to the calculation formula will help companies optimize their ICV strategies to maximize their score. Retroactively adjusting financial records to separately track required costs is also recommended.
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Additional Requirements
MOIAT is placing renewed emphasis on supplier engagement through initiatives like the Tawteen program. All suppliers must now register with Tawteen, an online platform connecting Emirati job seekers to career opportunities. This directs suppliers to actively support national employment goals.
The updates introduced additional clarification for service providers, defined as companies holding licenses other than industrial licenses. For service providers, all ICV attributes will be considered within the UAE except for investment, which will be based on the parent company if applicable.
Free zone companies providing services must now provide documentary evidence from the free zone authority detailing employee information like numbers and salaries/benefits in order to have Emiratization considered in their ICV calculation. This additional layer of validation aims to standardize reporting for service-focused operations.
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Seeking Expert Guidance
With numerous changes introduced, staying on top of all ICV program updates can be challenging for suppliers. Seeking professional assistance and guidance from ICV certificate consultants in the UAE who are well-versed with the latest MOIAT guidelines is advisable. Consultants can help suppliers understand the implications of changes, identify compliance requirements, validate calculations, and strengthen applications to facilitate a smooth certification process.
Conclusion
In conclusion, obtaining and maintaining ICV certification in UAE requires an ongoing commitment to understanding updated ICV certification requirements and optimizing operations accordingly. While staying on top of revisions requires diligence, proactively implementing solutions like engaging ICV consultants can help streamline the process. Seeking expert guidance ensures companies take full advantage of certification opportunities to support their growth and the UAE’s economic vision. Overall, prioritizing ICV compliance supports both business and national priorities.
Read More: Why is ICV Certification Critical for Your UAE Business?
