Why is ICV Certification Critical For Your Business in UAE?
The launch of the national In-Country Value (ICV) program offers a great opportunity for suppliers to win tenders of government and semi-government entities. Getting an ICV certificate gives the companies a certain weightage during tender assessments. The suppliers may obtain an ICV Certificate showing a score based on their contribution as per the latest audited financial statements and other factors.
A procurement-led ICV program was introduced in 2018 by the Abu Dhabi National Oil Company (ADNOC) to encourage Emiratisation, GDP diversification and strategic considerations. Later, upon the success of the program, a national ICV certification program was launched by the Ministry of Industry and Advanced Technology (MoIAT) in 2021. In this background, the suppliers are required to understand why ICV certification is critical for their business.
Why ICV Certification is Essential for Suppliers?
By becoming part of the ICV program, suppliers can contribute to the UAE’s strategic aim of bolstering the growth of the local industries and cutting the reliance on imports. The suppliers can also benefit from the financing incentives that will be announced in the future. These are some of the general benefits, but the core benefits of the ICV certification program are listed below:
- Suppliers who become part of the program can leverage the increase in demand for local products and services along with the opportunity for government contracting.
- Individual entrepreneurs, as well as small and medium-sized enterprises (SMEs), can boost their business growth as value chains become localised on account of the ICV program
- Key objectives of the ICV program include promoting local companies, introducing the products of the local companies into the market, and generating high-skilled jobs
- The ICV certification program creates more opportunities for local suppliers to enter partnerships with foreign businesses wishing to leverage the competitive advantages of a joint supply chain
- The holders of the ICV certificate can have a contractual advantage with the partner companies and federal authorities
Who Requires the ICV Certificate?
Companies operating inside or outside the UAE can apply for an ICV certificate as per the ICV guidelines. A supplier who directly provides the goods or services (Tier 1 Suppliers) needs to declare their ICV score to gain weightage during their tender evaluation and award process. Suppliers of Tier 2 and below categories are also required to provide their ICV certificate to boost their competitiveness in their tenders with Tier 1 suppliers. Providers of ICV certification services in Dubai can help companies easily obtain the certificate.
Key Requirements to Obtain an ICV Certificate in the UAE
Companies applying for an ICV certificate in the UAE are required to follow a series of conditions and requirements set out by the MoIAT. Suppliers who are in doubt about the certification process can consult with providers of bespoke ICV certification services in Dubai. Stated below is a list of requirements suppliers must follow to obtain an ICV certificate in the UAE:
- Audited Financial Statements, prepared as per International Financial Reporting Standards (IFRS), should be submitted by the suppliers seeking ICV certification in the UAE. The audit report should be signed by a licensed auditor and should not be more than two years older than the certifying year.
- Corporate groups with multiple legal entities must obtain separate ICV certificates for each entity. If a company has various branches in the same emirate, a combined certificate can be obtained provided that the branches perform the same activity under the same ownership
- A company with manufacturing and commercial licenses is required to have a separate accounting record for manufacturing and commercial activities. The ICV certifying bodies approved by the MoIAT will issue the separate ICV certificate for each license
- companies that are only ten months old and entities possessing no audited financial statements are allowed to use Management Accounts for up to nine months for the ICV certification process
- The suppliers are required to ensure that the figures entered in the ICV certificate tally with their latest audited financial statement
- The ICV certificate shall be valid for 14 months from the date of issuance of audited financial statements.
How can Jitendra Chartered Accountants Help you?
The suppliers are required to fill a supplier submission template (ICV Certificate Sample) prescribed by the MoIAT for the submission to Certifying bodies. The ICV Certificate template must be filled in as per the latest financial audit statements. This is where ICV certification service providers in Dubai, such as Jitendra Chartered Accountants (JCA) come in handy for the companies. JCA is a leading provider of ICV certification services in Dubai, UAE.
JCA can simplify the Template submission guidelines for the companies that require ICV certification. We can help business owners to understand the factors that determine their company’s ICV score. JCA can also help the companies with preparing the audited financial statements as per the IFRS.