Use this page to test whether a third-country company, group, or franchise/licensing model is inside Article 2 CSDDD and when the current Article 37 application wave starts.
The timing reflects the consolidated Directive (EU) 2024/1760 text after Directive (EU) 2025/794, not the earlier 2027 first-wave schedule.
Structured answer sets in this page tree.
Cited legal and guidance references.
For a non-EU company, CSDDD scope starts with Union turnover rather than an employee headcount. Article 2 covers third-country companies with more than EUR 450 million net turnover in the Union, ultimate parent companies of groups that reach that Union turnover threshold on a consolidated basis, and certain franchise or licensing arrangements with EU royalties above EUR 22.5 million and EU turnover above EUR 80 million. Article 37 then phases application: after Directive (EU) 2025/794, the first non-EU wave begins on 26 July 2028 for Article 2(2)(a) and (b) companies with more than EUR 900 million Union turnover, and the remaining Article 2 routes begin on 26 July 2029.
Start by separating the company law test from the turnover test. Article 2(2) applies to companies formed under third-country law. It does not add a non-EU employee threshold; the connecting factor is net turnover generated in the Union.
A third-country company is in Article 2 scope if it generated more than EUR 450 million net turnover in the Union in the financial year preceding the last financial year. A third-country ultimate parent is also in scope if the group reached that threshold on a consolidated basis, even if the parent company itself did not reach it alone.
Use Sorena to connect Article 2 turnover calculations, group structure records, authorised-representative evidence, and Article 37 wave dates into one reviewable CSDDD scope file.
The current Article 37 schedule is the amended schedule in the consolidated EUR-Lex text. It removes the former 26 July 2027 first wave and requires Member States to adopt and publish transposition measures by 26 July 2027.
For non-EU companies, the first application wave is 26 July 2028 for Article 2(2)(a) and (b) companies formed under third-country law that generated more than EUR 900 million net turnover in the Union. All other Article 2(2)(a) and (b) companies, and Article 2(2)(c) franchise/licensing companies, move into application on 26 July 2029.
The CSDDD scope test is not limited to single operating companies. Article 2 brings in ultimate parent companies where the group reaches the relevant threshold, and it separately captures certain franchise or licensing arrangements where the legal form is built around a common identity, common business concept, and uniform business methods.
If an ultimate parent company mainly holds shares in operational subsidiaries and does not take management, operational, or financial decisions affecting the group, Article 2(3) allows an exemption only if an EU-established subsidiary is designated to fulfil the relevant obligations. The parent remains jointly liable with the designated subsidiary for that subsidiary's failure to comply.
A defensible CSDDD non-EU scope file should let finance, legal, and sustainability reviewers reproduce the Article 2 route and the Article 37 date without relying on a narrative memo alone. Keep the calculation inputs, consolidation perimeter, and source citations together.
The evidence file should also show who can receive supervisory authority communications. Article 23 requires a company referred to in Article 2(2) operating in a Member State to designate an authorised representative established or domiciled in one of the Member States where it operates.
The most important mistake is using the old 2027 first-wave schedule after Directive (EU) 2025/794. The current consolidated Article 37 text starts CSDDD application on 26 July 2028 for the large Article 2(2)(a) and (b) third-country wave, then on 26 July 2029 for the remaining Article 2 routes.
The second mistake is treating non-EU scope as a worldwide revenue test. For third-country companies, Article 2(2) uses net turnover generated in the Union, while EU companies use net worldwide turnover under Article 2(1).
"Amended by DIRECTIVE (EU) 2025/794"
"net turnover of more than EUR 450 000 000 in the Union"
"royalties amounted to more than EUR 22 500 000 in the Union"
"The ultimate parent company shall remain jointly liable"
"designates as its authorised representative"
"generated most of its net turnover in the Union"
"from 26 July 2028 as regards companies referred to in Article 2(2)"
"This Directive shall also apply to companies which are formed in accordance with the legislation of a third country"
"Article 37 Transposition"
"Amended by DIRECTIVE (EU) 2025/794"