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What is the ICV Program?
The In-Country Value (ICV) Programme is a government-backed initiative launched by the UAE Government that ensures companies operating in a country contribute more to the local economy. It's like a scorecard that checks how much a business is helping the local community and economy grow.Here’s what it focuses on in simple terms:
- Buying Local: The program rewards businesses that spend more money on products and services made or provided within the country. For example, buying furniture from a local factory instead of importing it.
- Hiring Locally: Companies are encouraged to give jobs to local people and help train them to grow their skills.
- Investing Locally: If a business builds new factories, offices, or facilities within the country, it gets more points because this creates long-term benefits for the economy.
- Exporting Goods: If the company makes things locally and sells them outside the country, it's good for the economy, so they get recognized for that.
- Innovation and Research: Businesses that invest in local research and develop new ideas or technology are given more credit.
The purpose of the ICV Programme is to make sure businesses don’t just take profits out of the country but instead reinvest in ways that create jobs, support local suppliers, and build a stronger economy for everyone.
Who are the Strategic Partners?
The program’s strategic partners include prominent government entities and national companies, such as:
Abu Dhabi Department of Economic Development (ADDED): Represented by the Department of Government Support, which oversees 62 local entities.
Abu Dhabi National Oil Company (ADNOC): A major implementer of the program, leveraging its vast procurement needs to promote local industry.
Aldar Properties: A leading partner enhancing the real estate and construction supply chains.
The program’s network of partners continues to expand, with new entities expected to join, further amplifying its impact across various sectors.
Key Objectives of the ICV Program
The National ICV Program is designed to achieve the following objectives:
- Localization of Supply Chains: Develop new local industries and services to reduce reliance on imports.
- Attract Foreign Investments: Position the UAE as an attractive destination for diverse investments.
- Diversify the Economy: Broaden the UAE’s economic base and increase export capabilities.
- Private Sector Employment: Create valuable job opportunities for Emiratis in private industries.
- Enhance GDP Contributions: Stimulate growth in national GDP through private sector engagement.
- Invest in Innovation: Encourage spending on research, development, and advanced technologies.
What is an ICV Certificate?
The ICV Certificate is a vital component of the program. It reflects a company’s contribution to the UAE economy, represented by its ICV Score—a percentage value calculated based on factors such as:
Goods Manufactured/Third-Party Spend: Focus on local sourcing and manufacturing.
Investment: Capital injected into the UAE economy.
Emiratization: Hiring and training Emirati nationals.
Expatriate Contribution: Contribution of expatriate employees.
Bonuses: Additional points for exports, Emirati headcount, and investment growth.
This certificate is crucial for companies looking to secure contracts with government entities and national firms, as it forms a key part of the tender evaluation process.
ICV Certification Process
- Preparation of Audited Financial Statements: Ensure financial records comply with IFRS, are not older than two years, and are signed by a licensed auditor from the UAE Ministry of Economy.
- Verification by Authorized Firms: Obtain certification through MoIAT-authorized firms.
- Eligibility Criteria: Separate certificates may be required for different licenses. For companies with both manufacturing and commercial licenses, accounting records must distinguish between the two activities.
- Special Cases: Companies less than 10 months old can use management accounts for up to nine months for certification purposes.
Since its inception, the National ICV Program has made significant progress:
By mid-2024, the local expenditure of participating entities reached AED 48 billion, a notable increase from previous years.
Investments by ICV-certified companies totaled AED 205 billion, marking a 20% rise from 2023.
The number of Emiratis employed by certified companies grew by 40% in the first half of 2024, reflecting a focus on training and upskilling national talent.
Conclusion
The National In-Country Value Program is more than a policy; it’s a cornerstone of the UAE’s vision for a diversified, sustainable, and resilient economy. By supporting local industries, creating job opportunities, and fostering innovation, the ICV Program ensures that businesses and the nation move forward together. For companies, obtaining an ICV Certificate is not just about compliance; it’s about being part of the UAE’s transformative journey toward economic excellence.
