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# Navigating Legal Challenges in ICV Certification in the UAE

By ali abbas / July 18, 2025

The In-Country Value (ICV) Certification program, introduced by the UAE Ministry of Industry and Advanced Technology (MoIAT), has become an essential part of the national economic strategy. It is designed to promote local industry, create job opportunities for UAE nationals, and retain greater economic value within the country. However, while the benefits of obtaining the ICV certificate are well recognized—such as improved access to government contracts and enhanced credibility—many businesses face legal and regulatory challenges throughout the ICV certification process.

In this article, we explore the legal complexities surrounding ICV certification in the UAE and how businesses can effectively navigate them.

## Understanding ICV Certification in the UAE

The ICV Certificate measures a company’s contribution to the UAE economy based on several factors, including:

- Local procurement of goods and services
- Emiratization (hiring UAE nationals)
- Investment in fixed assets within the UAE
- Revenue retained in the UAE
- Export activities

Companies are required to obtain this certification if they want to participate in tenders from ICV-participating entities like ADNOC, Aldar, and Mubadala. The certification is based on audited financial statements and is valid for 14 months.

## Legal Challenges Faced by Businesses in ICV Certification

Despite its structured framework, the ICV process can involve several legal hurdles for companies, especially those with complex operations, foreign ownership, or multinational structures. Below are some of the most common legal challenges:

### 1. Complex Ownership Structures and Licensing Issues

Many UAE-based businesses operate under group structures, with parent companies, subsidiaries, and sister concerns sharing operations, resources, or financial statements. Determining which entity is eligible to apply for ICV certification can become legally complex.

Legal Risk:
Inaccurate submission of consolidated data or applying under the wrong trade license can lead to rejection of the application or non-recognition by government entities.

Solution:
Ensure that the entity applying for the certificate holds a valid UAE trade license and matches the audited financial statements. In the case of group companies, clarify eligibility for a group or consolidated ICV certificate with the certifying body in advance.

### 2. Auditor Selection and Compliance Risk

Only MoIAT-approved auditors are authorized to prepare the audited financial statements required for ICV evaluation. Businesses using unapproved auditors may have their financials rejected.

Legal Risk:
Using non-accredited auditors or failing to follow IFRS (International Financial Reporting Standards) can invalidate the application.

Solution:
Hire only MoIAT-registered audit firms and ensure the financial statements are fully compliant with IFRS and MoIAT guidelines. Clarify the scope of work with auditors to avoid omissions that could affect ICV scoring.

### 3. Data Accuracy and Misrepresentation

The ICV process requires full disclosure of payroll, procurement, and asset data. Any misrepresentation, whether intentional or not, can have serious legal consequences.

Legal Risk:
Falsifying or overstating local spending, employee Emiratization numbers, or investment values can lead to penalties, revocation of the certificate, or legal action under UAE commercial law.

Solution:
Maintain clear, verifiable documentation for all claims made during the certification process. Use internal audits and ERP systems to ensure data accuracy and traceability.

### 4. Language and Translation Requirements

All official documents submitted to the certifying body must be in Arabic, or legally translated versions must be provided.

Legal Risk:
Errors in translation, especially in financial or legal terminology, can lead to misinterpretation and rejection of the certificate.

Solution:
Use certified legal translators with experience in financial and tax documentation. Review all translations with your legal counsel before submission.

### 5. Contractual Implications and Tender Eligibility

Many government and semi-government tenders now include ICV scoring as a weighted factor in bid evaluation. Submitting an expired or invalid ICV certificate can disqualify a company from the tendering process.

Legal Risk:
Failure to submit a valid certificate can lead to disqualification, contract termination, or legal disputes with project partners.

Solution:
Track the validity period (14 months from the audit date) and renew the certificate well in advance. Include ICV clauses in supply chain contracts to manage compliance risks with subcontractors.

### 6. Free Zone vs Mainland Complications

Companies in UAE free zones may face additional legal challenges if their operations extend to the mainland or if their financials include offshore revenue.

Legal Risk:
Ineligible cost or revenue items included in the ICV score may lead to regulatory flags or require re-certification.

Solution:
Clearly separate mainland and free zone operations in financial reports. Discuss eligibility with the certifier and provide explanatory notes or legal opinions where necessary.

### Best Practices to Navigate Legal Challenges

1. Engage Legal and Tax Advisors Early
   Work with professionals who understand UAE laws, ICV policy, and cross-border financial reporting. Early involvement reduces risks and avoids rejections.
2. Maintain Transparent and Auditable Records
   Whether it’s payroll records for Emiratis, procurement logs, or asset registers, make sure your documents are organized and available for verification.
3. Train Internal Teams
   Finance, HR, and procurement departments should be trained on how their operations affect ICV scoring. Ensure everyone understands compliance requirements.
4. Implement Internal Controls
   Set up checks and balances within the company to prevent misreporting and ensure accurate submission of data to the certifier.
5. Monitor Regulatory Updates
   MoIAT and participating entities may update certification requirements. Stay informed through official channels or through your professional advisors.

### Conclusion

The ICV Certification process in the UAE is a powerful tool for companies looking to secure public sector contracts and demonstrate their commitment to the national economy. However, the journey to certification is not without legal and operational challenges. Complex ownership structures, data misreporting, non-compliance with auditing standards, and contractual risks are just a few of the hurdles that businesses must overcome.

By proactively addressing these challenges through robust internal governance, legal consultation, and proper planning, businesses can not only secure ICV certification but also strengthen their credibility, compliance, and long-term competitiveness in the UAE market.

If you need help with legal documentation, auditor coordination, or preparing your company for ICV certification, consulting a licensed corporate advisory firm is highly recommended.

Also Read: The Process of Obtaining ICV Certification in the UAE: A Complete Guide

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