The Emirates Government has created the In Country Value (ICV) certification program as an initiative to increase local content and to increase the contribution of Foreign suppliers to the national economy. The ICV certificate means a company is scoring points for its contribution to the local value chain and being prioritized by certified suppliers to provide public goods and services. This article considers the significance of ICV certification on UAE’s public and private sector partnerships and how it can reinforce business partnerships within the UAE.
The Role of ICV Certification in UAE’s Public Sector Partnerships
The UAE government seeks to boost the percentage of industrial projects and national companies that receive government tenders. Taking part in the ICV program means that suppliers are showing commitment to supporting the local economy and supporting the growth of the industrial sector. It will also give an opportunity for collaboration with government entities and other national companies.
Also, the government has set a goal to achieve maximum proportion content of local purchases and be supportive to the development of industrial sectors in the country. If suppliers source locally, they can reduce their carbon footprint, help local businesses and grow their local economy. And if companies take a holistic approach, this can also lead to the opportunity of collaboration on a greater scale with local suppliers and partners.
The Role of ICV Certification in UAE’s Private Sector Partnerships
ICV certification can benefit the private sector by improving their business partnership and making the private sector more competitive in market. Participation in the ICV program is a way for suppliers to show that they support local economy and help industrial development. It can bring with it more opportunities for working with local and international partners.
Benefits of ICV Certification for Partners
The ICV program brings several benefits to its partners, including:
Table 1: Benefits of ICV Certification for Partners
|
Benefit |
Description |
|
Localizing value chains |
Strengthens industrial self-sufficiency and allows better control over specifications and quality |
|
Business continuity |
Expands the variety of local supply options and ensures business continuity |
|
Time savings and simplified logistics |
Ensures the presence of suppliers in the UAE, resulting in significant time savings and simpler logistics |
|
Better awareness of products and services |
Helps in planning and expanding business goals |
|
Increased contribution to the UAE GDP |
Partners’ contribution to the UAE GDP is increased |
Benefits of ICV Certification for Suppliers
Registered suppliers also enjoy multiple advantages, including:
Table 2: Benefits of ICV Certification for Suppliers
|
Benefit |
Description |
|
Promotion of local companies |
Local companies are promoted and their products are introduced to the market |
|
Increased ability to provide products |
Suppliers can increase their ability to provide products to the market and create high-skilled job opportunities |
|
Partnerships with foreign companies |
Suppliers can enter partnerships with foreign companies |
|
Incentives from EDB |
Financial and non-financial incentives are provided by EDB to develop the suppliers’ businesses and improve their performance |
|
Increased demand for local products/services |
Demand for local products/services is increased, and suppliers have greater opportunities for government contracting |
|
Acceleration of growth for entrepreneurs and SMEs |
Entrepreneurs and SMEs can accelerate their growth with the localization of value chains |
Understanding the ICV Calculation Formula
Various factors are considered by the ICV calculation formula, which include:
- Goods manufacturing cost
- Investment in UAE
- Emiratization
- Expatriate contribution
- Bonus – revenue from outside UAE, Emirati headcount, and investment growth
The formula is being set to evaluate the supplier’s contribution to the UAE’s economy and assign a score with that can be applied to determine their eligibility for government tenders and contracts.
FAQs
- What is the National ICV Program?
The National ICV Program is a program sponsored by the UAE government aimed at supporting the national economy and industry by diverting the purchases of government and private sector entities to local suppliers that have obtained the ICV certificate.
- For whom can ICV certification be useful?
ICV certification can be used by both the public and private sectors to strengthen their business relationships and the competitiveness of the market.
- How will ICV certification benefit partners?
Some benefits of ICV certification for partners include localization of the value chain, business continuity, expanded volume of local supply options, better exposure of products and services in the local market and increased contribution to the UAE GDP for partners.
- How is the ICV score calculated?
A variety of factors, including goods manufacturing cost, Emiratization, expatriate contribution, and bonus factors (such as revenue from UAE outside, Emirati headcount, and investment growth), are used to calculate the ICV score.
In conclusion, the ICV certification program is important to all those firms that intend to bid on UAE government tenders and work with ADNOC. Localizing their operations can bring companies closer to the UAE economy with the incentive of improving their ICV score and getting a competitive advantage. The process of certification can be smooth if you decide to get in touch with professional ICV certification service providers who will provide you with the best possible guidance.