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CSDDDThird-country companies

Non-EU CSDDD scope uses Union turnover

Directive (EU) 2026/470 generally uses more than EUR 1.5 billion net turnover in the Union for a third-country company or relevant ultimate-parent group.

There is no employee threshold for the main third-country route. A separate franchise or licensing route remains, using Union royalties and Union turnover. Companies remaining in scope apply from 26 July 2029.

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Author
Sorena AI
Published
Feb 21, 2026
Updated
Jul 31, 2026
Sections
3

Structured answer sets in this page tree.

Primary sources
2

Cited legal and guidance references.

Publication metadata
Sorena AI
Published Feb 21, 2026
Updated Jul 31, 2026
Overview

Build the scope file from traceable Union-turnover, royalty, and group data, then appoint an if the company is in scope. The main third-country test uses the financial year preceding the last financial year. Do not use the superseded EUR 450 million or EUR 900 million general thresholds, the former lower franchise thresholds, or a 2028 first-wave date.

Section 1

Calculate the amended Union-turnover route

A company formed under third-country law enters the main CSDDD route when it generated more than EUR 1.5 billion in the financial year preceding the last financial year. There is no employee threshold for this route. The same Union-turnover test applies at consolidated level to a relevant third-country ultimate parent.

The route applies only when the condition is met for and ceases only when it has not been met for each of the last two relevant financial years. Article 2 separately excludes alternative investment funds () and undertakings for collective investment in transferable securities (); it does not automatically exclude their managers or every regulated financial undertaking.

  • Identify the third-country legal entity and relevant ultimate parent.
  • Reconcile net turnover generated in the Union in the financial year preceding the last financial year to approved financial records.
  • For the separate franchise or licensing route, confirm that Union agreements with independent third parties ensure a common identity, common business concept, and uniform business methods, then test more than EUR 75 million in Union royalties and more than EUR 275 million .
  • Document Member State allocation, branches, eliminations, currency conversion, and tested financial years.
  • Apply the two-consecutive-financial-years rule and record when the condition begins or ceases.
  • Check the AIF and exclusions and amended parent treatment before concluding scope; test a manager or other regulated financial undertaking separately.
Sources for this answer
Directive (EU) 2026/470
Current third-country scope source.
Consolidated Directive (EU) 2024/1760 as amended
Current source for the two-year entry and exit rule and the AIF and UCITS exclusions.
Section 2

Connect scope to representation, authority, and timing

An in-scope third-country company must designate a representative in a Member State where it operates and notify the required contact details to the relevant supervisory authority. Keep the accepted mandate, authority notifications, powers, resources, and current contact details with the scope file.

The is normally in the Member State where the company has a branch. If there is no branch, or there are branches in different Member States, competence follows the Member State where the company generated most Union turnover in the specified reference year. This is a Member State turnover test, not necessarily a comparison of individual branch revenue.

  • Designate an established or domiciled in a Member State where the company operates, obtain written or electronic acceptance, and give the representative the powers and resources needed to cooperate with supervisory authorities.
  • Determine the competent Member State under Article 24: use the Member State of the branch where there is one, or the Member State where the company generated most Union turnover if it has no branch or has branches in different Member States.
  • Use 26 July 2028 as the transposition deadline and 26 July 2029 as the application date.
  • Use 1 January 2030 as the Article 16 financial-year trigger.
  • Track national procedures, sanctions, and civil-liability rules separately.
Sources for this answer
Directive (EU) 2026/470
Current timing and amended implementation source.
Section 3

Retain the calculation and reassess it

A scope conclusion should let another reviewer reproduce the Union-turnover calculation and identify the financial periods, accounting framework, group perimeter, and Member State allocation used. Record an out-of-scope result with the same care as an in-scope result.

Reassess after acquisitions, disposals, new Union branches, franchise or licence changes, accounting-framework changes, material currency movements, or turnover changes that could start or end the two-year sequence. Track national transposition separately because procedures and sanctions come from the applicable Member State law.

  • Keep approved financial statements, the Union-turnover bridge, invoices or ledger extracts supporting Member State allocation, elimination entries, exchange rates, and reviewer approval.
  • Keep the group chart and control analysis used to identify the ultimate parent and consolidated perimeter.
  • For the franchise or licensing route, retain the agreements, independent-party analysis, common-identity and business-method evidence, Union royalty calculation, and Union-turnover calculation.
  • Record the result, tested years, application date, competent authority, , owner, next review date, and event-driven reassessment triggers.
  • Label customer-driven or voluntary due diligence separately if the company is below Article 2 scope.
Sources for this answer
Consolidated Directive (EU) 2024/1760 as amended
Current source for the two-consecutive-financial-years rule, third-country scope, exclusions, authorised representative, and competent supervisory authority.

Build a defensible Union-turnover file

Connect turnover, group, representation, competent-authority, timing, and reassessment evidence.

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Open Research Copilot

Connect the CSDDD decision to cited sources, owners, evidence, and reviewable implementation work.

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Next step
Open the amended CSDDD hub

Return to current scope, dates, due diligence, reporting, and enforcement guidance.

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Talk to Sorena
Discuss CSDDD implementation

Review the relevant entity, national-law dependency, evidence gap, and next control decision with Sorena.

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Primary sources

References and citations

Consolidated Directive (EU) 2024/1760 as amended
eur-lex.europa.eu
Referenced sections
  • Current source for the two-consecutive-financial-years rule, third-country scope, exclusions, authorised representative, and competent supervisory authority.
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