--- title: "CSDDD non-EU turnover threshold FAQ" canonical_url: "https://www.sorena.io/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/non-eu-turnover" source_url: "https://www.sorena.io/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/non-eu-turnover" author: "Sorena AI" description: "How non-EU companies should assess CSDDD scope using EU-generated turnover, group thresholds, authorised representative records, and competent authority evidence." published_at: "2026-05-09" updated_at: "2026-05-09" keywords: - "CSDDD non-EU turnover" - "CSDDD third-country companies" - "CSDDD Article 2 scope" - "CSDDD authorised representative" - "CSDDD" - "EU Corporate Sustainability Due Diligence Directive" - "non-EU turnover" - "third-country companies" - "EU turnover threshold" - "authorised representative" --- **[SORENA](https://www.sorena.io/)** - AI-Powered GRC Platform [Home](https://www.sorena.io/) | [Solutions](https://www.sorena.io/solutions) | [Artifacts](https://www.sorena.io/artifacts) | [About Us](https://www.sorena.io/about-us) | [Contact](https://www.sorena.io/contact) | [Portal](https://app.sorena.io) --- # CSDDD non-EU turnover threshold FAQ How non-EU companies should assess CSDDD scope using EU-generated turnover, group thresholds, authorised representative records, and competent authority evidence. *FAQ* *CSDDD* *EU* ## CSDDD non-EU turnover threshold Non-EU companies should test CSDDD scope against net turnover generated in the Union, not against global revenue alone. This FAQ explains the Article 2 scope test, the current Article 37 timing, and the evidence worth keeping for a third-country company scope file. For a company formed under non-EU law, CSDDD scope depends on EU-generated net turnover. Article 2 covers third-country companies that exceed the Union turnover threshold directly, through an ultimate parent group threshold, or through qualifying EU franchising or licensing arrangements. The practical work is to build a defensible EU-turnover file, identify the relevant Member State contact point, and revisit the analysis when EU sales, branches, group structure, or licensing arrangements change. ## Does worldwide turnover put a non-EU company in CSDDD scope? Not by itself. For companies formed under the law of a third country, Article 2 uses net turnover generated in the Union. A non-EU company is in scope if it generated more than EUR 450 million in net turnover in the Union in the financial year preceding the last financial year, or if it is the ultimate parent of a group that reached that Union threshold on a consolidated basis. Article 2 also contains a separate franchising and licensing route for third-country companies: qualifying EU franchising or licensing royalties above EUR 22.5 million, combined with more than EUR 80 million in Union net turnover, can bring the company or ultimate parent group into scope. The safe approach is to check EU-generated turnover and any qualifying licensing structure before treating a global group as in scope. - Start with legal formation: confirm the company is formed under non-EU law. - Calculate net turnover generated in the Union for the relevant financial year, separately from worldwide turnover. - Check whether the company itself, or the ultimate parent group on a consolidated basis, exceeds the EUR 450 million Union turnover threshold. - Separately test qualifying EU franchising or licensing arrangements for the EUR 22.5 million royalty threshold and the EUR 80 million Union turnover condition. Sources for this answer: - [Directive (EU) 2024/1760, Article 2 scope for third-country companies](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 2 states the non-EU company scope routes and uses net turnover generated in the Union for third-country companies. - [Consolidated Directive (EU) 2024/1760, Article 37 as amended by Directive (EU) 2025/794](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - The consolidated text records Directive (EU) 2025/794 as an adopted amendment and sets the current application dates for third-country companies. ## Which financial years matter for a non-EU turnover analysis? Article 2 frames the non-EU threshold by reference to the financial year preceding the last financial year, and it says the Directive applies only if the scope conditions are met in two consecutive financial years. A useful scope file therefore should not contain a single annual sales number with no bridge to the statutory test. Current Article 37, as amended by Directive (EU) 2025/794, applies the first non-EU wave from 26 July 2028 for Article 2(2)(a) and (b) companies that generated more than EUR 900 million in Union net turnover in the financial year preceding the last financial year before that date. Other Article 2(2) companies follow from 26 July 2029. Avoid describing the 2025 timing change as only a proposal. - Keep the calculation period explicit: financial year, preceding financial year, and whether the latest adopted or required financial statements support the numbers. - Preserve evidence that the Article 2 conditions were met or not met in two consecutive financial years. - For first-wave timing, identify whether Union net turnover exceeded EUR 900 million for the current Article 37 application rule. - For companies below the first-wave amount but still above the Article 2 scope threshold, record why the 26 July 2029 application date is the working date. Sources for this answer: - [Directive (EU) 2024/1760, Article 2 consecutive-year scope rule](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 2 provides that CSDDD applies only if the relevant scope conditions are met in two consecutive financial years. - [Consolidated Directive (EU) 2024/1760, Article 37 as amended by Directive (EU) 2025/794](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Article 37 now sets 26 July 2028 for the first third-country company wave above EUR 900 million Union turnover and 26 July 2029 for other covered companies. ## What should a non-EU company do if it appears to be in scope? If the Article 2(2) test is met, the company should prepare the governance and regulator-facing records that the Directive expects from third-country companies. Article 23 requires an authorised representative established or domiciled in a Member State where the company operates, accepted by that representative, and empowered to receive supervisory authority communications. Article 24 then points to the competent supervisory authority. For a third-country company, the competent authority is generally the Member State where the company has a branch. If there is no branch, or there are branches in several Member States, the relevant authority is tied to where the company generated most of its Union net turnover under the Article 24 rule. - Identify EU branches and the Member State where each branch is located. - If there is no single-branch answer, rank Member States by Union net turnover for the relevant period. - Designate an authorised representative in a Member State where the company operates and keep the signed acceptance. - Record the representative's name, address, email address, telephone number, mandate, and notification trail to the supervisory authority. Sources for this answer: - [Directive (EU) 2024/1760, Article 23 authorised representative](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 23 requires covered third-country companies operating in a Member State to designate and empower an authorised representative. - [Directive (EU) 2024/1760, Article 24 supervisory authority for third-country companies](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 24 ties the competent supervisory authority for third-country companies to a branch location or, where relevant, the Member State of highest Union net turnover. ## What evidence should support the scope decision? A useful non-EU turnover file should let finance, legal, sustainability, and regional teams reproduce the conclusion without relying on memory. It should connect the legal entity and group perimeter to the Union turnover calculation, branch footprint, licensing arrangements, and authorised representative status. Article 28 also shows why this evidence matters externally: Member States and the European Network of Supervisory Authorities cooperate to identify third-country companies in scope, including through information about net turnover generated in the Union. The company should expect its EU-turnover position to be understandable to a supervisory authority. - Legal entity map showing the third-country company, subsidiaries, branches, and ultimate parent relationship. - EU net-turnover workbook by Member State, with source financial-system reports and reconciliation to financial statements. - Consolidated group-threshold analysis where Article 2(2)(b) could apply. - Franchising or licensing register showing EU royalties, common identity or business concept assumptions, and the EUR 22.5 million and EUR 80 million tests. - Two-year threshold history showing whether Article 2 conditions have been met or have ceased to be met. - Authorised representative appointment, acceptance, mandate, authority notifications, and any request to change competent supervisory authority after a turnover shift. Sources for this answer: - [Directive (EU) 2024/1760, Article 28 European Network of Supervisory Authorities](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 28 describes Member State cooperation and information exchange for assessing whether a third-country company meets Article 2 criteria. - [Directive (EU) 2024/1760, Article 5 due diligence documentation](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 5 requires companies to retain documentation and supporting evidence for actions taken to fulfil due diligence obligations. ## What mistakes should teams avoid? The main mistake is treating 'non-EU turnover' as a general sales concept. For CSDDD scope, the relevant question is Union-generated net turnover for a company formed under third-country law, plus any group or franchising/licensing route in Article 2. A second mistake is copying old application dates or proposal language into a scope memo. The consolidated Directive records Directive (EU) 2025/794 as an adopted amendment to Article 37, so timing notes should use the current 26 July 2028 and 26 July 2029 structure where timing is discussed. - Do not use global revenue as a substitute for Union net turnover for third-country company scope. - Do not ignore group-level consolidation where the company is an ultimate parent. - Do not skip the franchising and licensing route if EU royalties and common-brand operating models are material. - Do not assign the competent authority without checking branch locations and the Member State of highest Union net turnover. - Do not cite a 2025 Commission proposal as if it were the current timing rule; use the adopted consolidated Article 37 position. Sources for this answer: - [Directive (EU) 2024/1760, Article 2 third-country company scope](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Article 2 supports the distinction between worldwide turnover for EU companies and Union-generated turnover for third-country companies. - [Consolidated Directive (EU) 2024/1760, Article 37 as amended by Directive (EU) 2025/794](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - The consolidated text grounds the current Article 37 timing after Directive (EU) 2025/794. ## Primary sources - [Directive (EU) 2024/1760, Article 2 scope for third-country companies](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Primary CSDDD source for third-country company scope, EU-generated net turnover thresholds, group scope, and franchising or licensing scope. - Quote: "generated a net turnover of more than EUR 450 000 000 in the Union" - [Consolidated Directive (EU) 2024/1760, Article 37 as amended by Directive (EU) 2025/794](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Current consolidated CSDDD text showing Directive (EU) 2025/794 as an adopted amendment and setting Article 37 timing. - Quote: "Amended by DIRECTIVE (EU) 2025/794" - [Directive (EU) 2024/1760, Articles 23 and 24 on authorised representative and supervisory authority](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Grounds the authorised representative and competent supervisory authority concepts for covered third-country companies. - Quote: "designates as its authorised representative" - [Directive (EU) 2024/1760, Article 28 supervisory cooperation](https://eur-lex.europa.eu/eli/dir/2024/1760/oj?ref=sorena.io) - Grounds the practical need for an auditable EU-turnover position because Member States exchange information on Union-generated turnover for third-country companies. - Quote: "net turnover generated in the Union" ## Topic Guides - [CSDDD adverse impact prioritisation workflow](/artifacts/eu/corporate-sustainability-due-diligence-directive/adverse-impact-prioritisation-workflow.md): A CSDDD workflow for identifying actual and potential adverse human rights and environmental impacts, ranking severity and likelihood, and documenting prevention, mitigation, remediation, and stakeholder evidence. - [CSDDD Applicability Test: EU and Non-EU Company Scope](/artifacts/eu/corporate-sustainability-due-diligence-directive/applicability-test.md): Test whether Directive (EU) 2024/1760 may apply to an EU or non-EU company using grounded CSDDD employee, turnover, group, franchise, royalty, exclusion, and phase-in checks. - [CSDDD chain of activities and supplier due diligence](/artifacts/eu/corporate-sustainability-due-diligence-directive/chain-of-activities-and-suppliers.md): Explain CSDDD chain-of-activities scope, upstream and downstream boundaries, subsidiaries, direct and indirect business partners, supplier risk segmentation, and evidence. - [CSDDD Chain of Activities Boundaries](/artifacts/eu/corporate-sustainability-due-diligence-directive/chain-of-activities-boundaries.md): Define CSDDD upstream and downstream chain of activities boundaries for subsidiaries, direct and indirect business partners, distribution, transport, storage, and records. - [CSDDD chain of activities boundaries: upstream and downstream FAQ](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/chain-of-activities-boundaries.md): FAQ on how the CSDDD defines chain of activities boundaries for subsidiaries, direct and indirect business partners, upstream activities, downstream logistics, and evidence. - [CSDDD civil liability under Article 29: what companies should check](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/civil-liability.md): FAQ on CSDDD Article 29 civil liability: liability conditions, protected legal interests, causation, compensation, limitation periods, and evidence disclosure. - [CSDDD Climate Transition Plan Requirements](/artifacts/eu/corporate-sustainability-due-diligence-directive/climate-transition-plan.md): Article 22 CSDDD guidance for climate transition plans: business model alignment, targets, actions, funding, governance, and 12-month progress updates. - [CSDDD complaints and notifications FAQ](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/complaints.md): FAQ on Article 14 CSDDD complaint and notification mechanisms, who may complain, follow-up rights, confidentiality, retaliation, and evidence. - [CSDDD compliance duties and evidence guide](/artifacts/eu/corporate-sustainability-due-diligence-directive/compliance.md): A grounded CSDDD compliance guide covering due diligence policy, adverse impact identification, prevention, corrective action, complaints, monitoring, reporting, climate plans, and supervisory evidence. - [CSDDD contractual assurances FAQ for Articles 10 and 11](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/contractual-assurances.md): How CSDDD Articles 10 and 11 use contractual assurances with business partners, verification, SME support, action plans, and suspension or termination escalation. - [CSDDD deadlines and compliance calendar after Directive (EU) 2025/794](/artifacts/eu/corporate-sustainability-due-diligence-directive/deadlines-and-compliance-calendar.md): Current CSDDD calendar for transposition, application phases, Article 16 reporting exceptions, Commission guidance dates, and practical compliance evidence. - [CSDDD due diligence checklist](/artifacts/eu/corporate-sustainability-due-diligence-directive/checklist.md): A grounded CSDDD checklist for scope, due diligence policy, chain-of-activities risk mapping, impact prioritisation, action plans, complaints, monitoring, communication, climate planning, and evidence. - [CSDDD Due Diligence Steps Playbook for Articles 5 and 7-16](/artifacts/eu/corporate-sustainability-due-diligence-directive/due-diligence-steps-playbook.md): A grounded playbook for the CSDDD due diligence sequence: policy integration, impact assessment, prioritisation, prevention, correction, remediation, stakeholder engagement, complaints, monitoring, communication, and evidence. - [CSDDD FAQ: scope, dates, duties, liability, and evidence](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq.md): Practical answers on CSDDD scope, current application dates, chain of activities, due diligence duties, complaints, remediation, civil liability, climate plans, and evidence. - [CSDDD franchising and licensing scope FAQ](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/franchising.md): FAQ on when franchise or licensing networks can fall within Article 2 of the EU CSDDD, including royalties, turnover, EU and non-EU treatment, and evidence. - [CSDDD grievance and remediation workflow guide](/artifacts/eu/corporate-sustainability-due-diligence-directive/grievance-and-remediation-workflows.md): Build a CSDDD grievance, notification, stakeholder engagement, and remediation workflow around Articles 12, 13, and 14 of Directive (EU) 2024/1760. - [CSDDD Liability and Penalties: enforcement, fines, and civil claims](/artifacts/eu/corporate-sustainability-due-diligence-directive/liability-and-penalties.md): A grounded guide to CSDDD supervisory enforcement, penalty mechanics, civil liability, compensation limits, evidence records, and national transposition caveats. - [CSDDD Non-EU Turnover Thresholds and Scope Waves](/artifacts/eu/corporate-sustainability-due-diligence-directive/scope-waves-and-non-eu-turnover.md): Article 2 and Article 37 CSDDD scope guide for non-EU Union turnover, group routes, franchise and licensing routes, and current application dates after Directive (EU) 2025/794. - [CSDDD Omnibus timing changes after Directive (EU) 2025/794](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/omnibus-current-date-changes.md): FAQ answer on current CSDDD Article 37 dates after Directive (EU) 2025/794 and how to separate adopted timing changes from proposal-stage Omnibus simplification. - [CSDDD penalties and fines under Article 27](/artifacts/eu/corporate-sustainability-due-diligence-directive/penalties-and-fines.md): How CSDDD Article 27 sets penalty rules, turnover-based fine caps, public decision publication, supervisory authority powers, and national transposition caveats. - [CSDDD prevention vs mitigation: potential and actual adverse impacts](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/prevention-vs-mitigation.md): CSDDD FAQ on when to prevent or mitigate potential adverse impacts, when to end or minimise actual adverse impacts, and what evidence records to keep. - [CSDDD remediation FAQ: when companies must remedy adverse impacts](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/remediation.md): FAQ on CSDDD remediation: when Article 12 requires remedy, how complaints and stakeholder engagement affect the response, and what evidence to keep. - [CSDDD Remediation Plan Template: Article 12, 13 and 14 evidence](/artifacts/eu/corporate-sustainability-due-diligence-directive/remediation-plan-template.md): A CSDDD remediation plan template for actual adverse impacts, complaint inputs, stakeholder engagement, action records, and monitoring evidence. - [CSDDD requirements: scope, due diligence, climate plan, and evidence](/artifacts/eu/corporate-sustainability-due-diligence-directive/requirements.md): A grounded map of the Corporate Sustainability Due Diligence Directive requirements across scope, due diligence policy, impact assessment, complaints, remediation, monitoring, communication, and climate transition planning. - [CSDDD risk prioritisation FAQ: severity, likelihood, and evidence](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/risk-prioritisation.md): How to prioritise CSDDD adverse impacts when teams cannot address everything at once, using severity, likelihood, stakeholder evidence, and a reviewable rationale. - [CSDDD Scope Thresholds: EU, Non-EU, Group and Franchise Routes](/artifacts/eu/corporate-sustainability-due-diligence-directive/scope-thresholds-and-in-scope-groups.md): Article 2 CSDDD scope thresholds for EU companies, non-EU Union turnover, ultimate-parent groups, franchise and licensing routes, consecutive-year tests, and evidence records. - [CSDDD scope waves: current Article 37 dates and thresholds](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/scope-waves.md): FAQ on the current CSDDD phase-in after Directive (EU) 2025/794: 26 July 2028, 26 July 2029, Article 2 scope thresholds, and evidence to retain. - [CSDDD Supplier Contract Clause Review Workflow](/artifacts/eu/corporate-sustainability-due-diligence-directive/supplier-contract-clause-review-workflow.md): Review supplier contract clauses against CSDDD Articles 10 and 11: contractual assurances, verification, SME fairness, support, action plans, and escalation evidence. - [CSDDD Supplier Contract Clauses: Articles 10 and 11 Evidence](/artifacts/eu/corporate-sustainability-due-diligence-directive/supplier-contract-clauses.md): How to use CSDDD supplier contract clauses without treating clauses as a substitute for due diligence: contractual assurances, verification, SME support, action plans, limits, and evidence. - [CSDDD supplier human rights impact scoring template](/artifacts/eu/corporate-sustainability-due-diligence-directive/supplier-human-rights-risk-scoring-template.md): A CSDDD supplier impact scoring template for Article 8 identification, Article 9 prioritisation, severity, likelihood, stakeholder input, chain-of-activities boundaries, and evidence records. - [CSDDD transition plans FAQ: Article 22 climate plan requirements](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/transition-plans.md): FAQ on CSDDD Article 22 climate transition plans: targets, decarbonisation levers, investment and funding, governance, CSRD overlap, and evidence records. - [CSDDD vs CSRD: Due Diligence and Reporting Compared](/artifacts/eu/corporate-sustainability-due-diligence-directive/csddd-vs-csrd.md): Compare CSDDD due diligence duties with CSRD sustainability reporting, including scope, timing, Article 16 reporting, evidence overlap, assurance, and enforcement. - [CSDDD vs German LkSG Comparison](/artifacts/eu/corporate-sustainability-due-diligence-directive/csddd-vs-german-lksg.md): Compare the EU CSDDD with Germany's LkSG without mixing directive duties, national-law duties, chain boundaries, complaints, reporting, and enforcement routes. - [CSDDD vs OECD Guidelines](/artifacts/eu/corporate-sustainability-due-diligence-directive/csddd-vs-oecd-guidelines.md): Compare the binding EU CSDDD with the OECD Guidelines for responsible business conduct across scope, due diligence duties, business relationships, remediation, and evidence. - [How CSDDD overlaps with OECD, UNGP, and ILO standards](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/oecd-ungp-and-ilo-overlap.md): FAQ on how OECD responsible business conduct guidance, the UN Guiding Principles, and ILO labour standards inform CSDDD due diligence without being the same legal instrument. *Recommended next step* *Placement: after evidence section* ## Build a CSDDD scope evidence file Use the Article 2 thresholds, Article 23 representative records, and Article 24 authority logic to turn a non-EU turnover question into a reviewable scope file. - [Open Research Copilot](/solutions/research-copilot.md): Check CSDDD scope questions against cited source material. - [Discuss CSDDD scope](/contact.md): Review EU turnover thresholds, representative records, and authority evidence with Sorena. --- [Privacy Policy](https://www.sorena.io/privacy) | [Terms of Use](https://www.sorena.io/terms-of-use) | [DMCA](https://www.sorena.io/dmca) | [About Us](https://www.sorena.io/about-us) (c) 2026 Sorena AB (559573-7338). 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