The In-Country Value (ICV) program, a transformative initiative introduced in Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE), has been a catalyst for economic growth since its inception. This program, pioneered by the Abu Dhabi National Oil Company (ADNOC) in January 2018, has not only propelled the growth of individual suppliers and businesses but has also made substantial contributions to the national economy.
Understanding ICV Certification in UAE
ICV Certification, a cornerstone of the ICV program, is a dynamic initiative introduced by ADNOC in the UAE to gauge the contribution of goods and services from businesses, particularly in the oil and gas sector. The issuance of the ICV Certificate by ADNOC serves as a testament to the level of In-Country Value achieved by a company operating within the UAE.
Goals of ICV Certification in Abu Dhabi
In Abu Dhabi, the Abu Dhabi Local Content Programme (ADLC) was established with specific goals in mind. This initiative, driven by the Abu Dhabi Department of Economic Development (ADDED), aims to promote GDP growth, enhance human capital development, and foster the adoption of technology. By sourcing more products and services domestically, increasing Emiratis’ access to private sector employment, and advancing technological capabilities, the program contributes significantly to the overall economic landscape.
Who Should Obtain ICV Certification?
The mandate for ICV Certification extends to all suppliers and contractors of ADNOC and its subsidiaries. This encompasses a broad spectrum of businesses, including drilling contractors, engineering firms, and logistics providers, which provide goods and services to ADNOC. Furthermore, the ICV Certification program is not limited to the oil and gas sector; companies in other industries seeking contracts with the UAE government are also encouraged to obtain ICV Certification.
Benefits Galore: Impact of ICV Certification in UAE
Since its inception, the ADNOC ICV program has yielded tangible benefits. Over 1,500 Emiratis have found employment in the private sector through this program, and it has injected over Dh44 billion ($12 billion) into the UAE economy. More than just a certification, ICV has become a catalyst for increased private sector participation, GDP diversification, and the localization of crucial supply chain components.
The program, by examining various variables such as investment, employment of Emiratis, funding from expatriates, and income earned outside the UAE, has led to the emergence of new business lines that contribute significantly to the national economy.
The Process of Obtaining ICV Certification
Companies aspiring to obtain ICV Certification in UAE need to adhere to a structured process. Compliance with ADNOC’s ICV Financial criteria is paramount. This involves the release of audited financial statements, completion of the ICV template, evaluation by an authorized certifying body, and the ultimate acquisition of the ICV certificate.
The Nuances of ICV Certification: Key Considerations
Several key considerations come into play for businesses aiming to secure ICV Certification. Compliance with International Financial Reporting Standards (IFRS) financials is crucial, ensuring transparency and reliability in financial reporting. Additionally, businesses with multiple branches under one ownership are eligible for a single ICV certificate. Owner salary credits, limited to AED 120,000 each month per owner if registered under the Wage Protection System (WPS), are also factored into the ICV score.
Internal costs, excluding depreciation, are considered, and the number of employees is accounted for annually. Suppliers based in Mainland UAE receive a 10% reward in the ICV score, and payments made to governmental authorities contribute positively to the ICV.
The Evolution and Future of ICV Certification
Since its implementation, the ICV certification program has evolved, currently residing in its third version. While the ICV score remains a focal point, the program has expanded to encompass Corporate Social Responsibility (CSR) activities. The documentation now reflects a clear corporate structure, emphasizing the long-term relationship businesses in the UAE have with the nation and its stakeholders.
The program, initially rooted in the oil and gas sector, has now permeated various industries. It empowers companies with value ratings that quantify the benefits the nation derives from their operations. The strategic considerations, GDP diversification, and Emiratization encouraged by ICV have positioned it as a vital contributor to the sustained growth of the UAE.
In conclusion, the In-Country Value (ICV) Certification program in the UAE stands as a testament to the nation’s commitment to economic growth, sustainability, and the welfare of its citizens. Beyond being a mere certification, ICV has become a dynamic force driving businesses towards a more inclusive, locally focused, and technologically advanced future. As the program continues to evolve, businesses navigating the certification process can rely on trusted partners.
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Learn more about the ICV certificate and how you can obtain it with the help of our expert advisors and service providers in the UAE. We make sure that your business keeps thriving in the UAE and that you get all the possible benefits for your business.
