The In-Country Value (ICV) program in the UAE is designed to boost local economic growth, encourage the use of domestic goods and services, and create employment opportunities for UAE nationals. Launched as part of the UAE’s strategic vision to strengthen its industrial and economic ecosystem, ICV certification plays a vital role for companies competing in government and private sector projects. A crucial element of this certification is the ICV score, which reflects a company’s contribution to the local economy. Understanding how this score is calculated and how it can be improved is essential for companies seeking higher recognition and competitiveness. Contact ICV Certificate experts in UAE.
What is ICV Score?
The ICV score is a numeric representation of a company’s value contribution to the UAE economy. It is calculated based on several factors, including local spending, operational activities, and employment of UAE nationals. A higher ICV score indicates stronger participation in the local economy and often provides advantages in bidding for contracts, especially in sectors like oil, gas, and construction.
The ICV score ranges from 0 to 100, with points allocated across different categories depending on how well the company meets local content, employment, and operational requirements.
How is the ICV Score Calculated?
ICV scoring is calculated based on five main components:
1. Local Direct Spend (LDS)
This is the percentage of company expenditure on goods and services sourced from within the UAE. It is a major component of the ICV score, often contributing up to 50% of the total score.
- Example: If a company spends 60% of its procurement budget on UAE-based suppliers, it scores proportionally higher in this category.
- Calculation:
LDS Score=Local SpendTotal Spend×50\text{LDS Score} = \frac{\text{Local Spend}}{\text{Total Spend}} \times 50LDS Score=Total SpendLocal Spend×50
2. Emiratization
The proportion of UAE nationals employed in the company, including direct employees and contractors, is critical. The score depends on the number and level of UAE nationals in the workforce.
- Calculation:
Emiratization Score=Number of UAE EmployeesTotal Workforce×20\text{Emiratization Score} = \frac{\text{Number of UAE Employees}}{\text{Total Workforce}} \times 20Emiratization Score=Total WorkforceNumber of UAE Employees×20
3. Local Manufacturing / Production
For companies engaged in manufacturing or production, having facilities in the UAE contributes positively. Points are awarded for investment in local infrastructure, equipment, and manufacturing capacity.
4. Investments in UAE-based Research & Development (R&D)
Companies investing in research, training, and development activities locally also earn points. This encourages knowledge transfer and innovation within the UAE economy.
- Example: Spending on local R&D labs, training UAE nationals, or creating patents in the UAE increases the ICV score.
5. Operational Presence
This includes having offices, warehouses, and management operations within the UAE. A stronger operational footprint translates into higher scores, reflecting long-term commitment to the local economy.
- Calculation:
Operational Score=Local Operations ExpenditureTotal Operations Expenditure×10\text{Operational Score} = \frac{\text{Local Operations Expenditure}}{\text{Total Operations Expenditure}} \times 10Operational Score=Total Operations ExpenditureLocal Operations Expenditure×10
Each component is weighted according to the sector and nature of the business. The final ICV score is a sum of all category scores.
Ways to Improve Your ICV Score
Improving the ICV score requires strategic planning and operational adjustments. Here are several actionable ways:
1. Increase Local Spending
Prioritize sourcing products and services from UAE-based suppliers. This can include office supplies, logistics, construction materials, or specialized services.
2. Enhance Emiratization
Recruit more UAE nationals, provide training programs, and implement career development initiatives. Supporting Emirati employees in leadership or technical roles significantly boosts the ICV score.
3. Invest in Local Manufacturing
Set up manufacturing or assembly facilities within the UAE. Even partial local production or assembly can positively affect the score.
4. Expand Local R&D
Invest in UAE-based innovation, technology, or training programs. Companies can collaborate with universities or research centers to maximize points in this category.
5. Strengthen Operational Footprint
Open offices, warehouses, or management hubs within the UAE. A physical presence demonstrates commitment to the local economy and ensures operational expenditures contribute to the score.
6. Partner with Certified Local Suppliers
Collaborate with other ICV-certified companies. This ensures that your supply chain supports local content, improving your own ICV calculations.
7. Regularly Audit and Document Contributions
Maintain accurate records of local spend, employment, and operational activities. Proper documentation ensures your contributions are recognized during the certification process.
Benefits of a High ICV Score
A high ICV score offers tangible benefits for companies in the UAE:
- Contracting Advantage: Government and semi-government entities prioritize ICV-certified suppliers with higher scores.
- Competitive Differentiation: A higher score demonstrates commitment to local economic growth, improving your brand reputation.
- Long-Term Cost Savings: Local sourcing and operations may reduce logistics and import costs.
- Talent Attraction: Companies with high ICV scores attract skilled Emirati professionals seeking stable career opportunities.
Conclusion
The ICV score in the UAE is more than a number—it is a reflection of a company’s dedication to the country’s economic development. By understanding how the score is calculated and implementing strategies such as increasing local spend, boosting Emiratization, investing in local manufacturing and R&D, and strengthening operational presence, companies can significantly improve their score.
A strong ICV score not only enhances your competitiveness in tenders and contracts but also positions your company as a responsible corporate citizen contributing to the UAE’s long-term growth and sustainability goals.