What is an ICV Score?
Many businesses in the UAE lose out on valuable government contracts without knowing why. They follow all the rules, meet deadlines, and offer competitive prices, but still don’t get selected. One key reason behind this could be a low or missing ICV score. Without this score, your company might be placed at the bottom of the list, even if everything else is in order. Understanding what an ICV score is and how to improve it can give your business a strong edge in the UAE’s competitive market.
ICV certification services in the UAE by Jitendra Chartered Accountants (JCA) allow you to obtain a certificate with a clear score based on your recent financial statements.
What Does an ICV Score Mean?
The ICV (In-Country Value) score measures how much your company contributes to the UAE’s economy. It checks how much of your spending stays within the country. This includes buying local goods, hiring Emirati workers, and investing in the UAE’s industries.
The ICV score is used by several major UAE organisations, like ADNOC and other government-related entities, during the tender process. The higher your ICV score, the better your chances of winning contracts.
Why Was the ICV Program Introduced?
The ICV program started in 2017 by ADNOC. It was created to help the UAE grow its local economy and create more jobs for UAE nationals. Now, several other major organisations also follow the ICV program.
The main goals are:
- Create job opportunities for Emiratis
- Encourage businesses to buy and invest locally
- Strengthen key sectors like oil, gas, and manufacturing
How Is the ICV Score Calculated?
Your ICV score is calculated using a specific formula based on your company’s activities. The idea is to measure how much of your revenue stays within the UAE.
Here’s a general formula:
ICV Score = (Local Spend / Total Revenue) × 100
But the formula can change depending on your business type. Here’s how it works for different types:
- For Manufacturers:
ICV = (Manufacturing costs in UAE + Emirati salaries + 60% of expat salaries) / Total costs - For Suppliers:
ICV = (Value of purchase × supplier’s ICV + Emirati salaries + 60% of expat salaries) / Total costs - For Investments:
25% of total UAE assets are considered for the ICV value.
ICV = Net book value of UAE assets / Total net book value
What Goes Into the ICV Score?
The following are some of the key areas that affect your score:
- Local purchases: Goods and services bought from UAE suppliers
- Emiratization: Number of Emiratis you employ
- Expat labour costs: 60% of their salaries are counted
- Investments: Buildings, machines, and other assets in the UAE
- Revenue from exports: Additional score if you earn money from outside the UAE
Why Is the ICV Score Important?
When applying for government or semi-government contracts, your ICV certificate in the UAE can be a deciding factor. Many tenders now ask for the ICV score during the evaluation process.
Even if a tender doesn’t require it, having a good ICV score can give you an advantage. A higher score shows that you support the UAE economy, which makes your bid more attractive.
If you submit a bid without an ICV certificate in the UAE, you’ll be marked with a 0% score, putting you at a clear disadvantage.
What Is Considered a Good ICV Score?
There’s no set number that counts as “good.” A higher score is always better, but each tender may have its own requirements. Always check the specific tender details to know the expected score range.
What matters more is improving your score over time. Even if your current score is low, showing progress through an improvement plan can help.
How to Improve Your ICV Score?
Here are simple steps you can take to raise your ICV score:
Buy from Local Suppliers: Try to source your goods and services from within the UAE.
Hire UAE Nationals: Employ Emirati workers and support their training and growth.
Invest in UAE Assets: Build factories, offices, or buy machinery that will stay in the country.
Engage with the Community: Join programs that support local charities, education, or environmental causes.
Share Knowledge Locally: Help train other UAE-based businesses or work with universities on projects.
Hire ICV certification services in the UAE: Seek an expert’s help to obtain an ICV certificate and a clear score based on your recent financial statements.
How can Jitendra Chartered Accountants (JCA) help?
Your ICV score is not only a number. It’s proof that your company has its stake in the UAE. It can become the ticket to securing very good business agreements, particularly for government contracts. JCA provides comprehensive ICV certification services in Dubai, UAE, helping you obtain an ICV certificate and improve your ICV score.