---
title: "CSDDD Non-EU Turnover Thresholds and Scope Waves"
canonical_url: "https://www.sorena.io/artifacts/eu/corporate-sustainability-due-diligence-directive/scope-waves-and-non-eu-turnover"
source_url: "https://www.sorena.io/artifacts/eu/corporate-sustainability-due-diligence-directive/scope-waves-and-non-eu-turnover"
author: "Sorena AI"
description: "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."
published_at: "2026-05-09"
updated_at: "2026-05-25"
keywords:
  - "CSDDD Article 2"
  - "CSDDD Article 37"
  - "Directive (EU) 2025/794"
  - "non-EU turnover"
  - "Union turnover"
  - "ultimate parent company"
  - "franchise licensing CSDDD"
  - "CSDDD"
  - "Directive (EU) 2024/1760"
  - "Article 2"
  - "Article 37"
---
**[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 Thresholds and Scope Waves

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* *Scope guide* *EU*

## CSDDD non-EU scope turnover thresholds and application waves

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.

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.

## Article 2 non-EU scope test

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.

- Entity route: third-country company plus more than EUR 450 million net turnover generated in the Union.
- Group route: third-country ultimate parent company plus a group that reached the EUR 450 million Union turnover threshold on a consolidated basis.
- Timing input: use the financial year preceding the last financial year for Article 2(2) turnover tests.
- Competent authority input: identify the Member State branch, or if there is no branch or multiple branches, the Member State where the company generated the highest Union turnover.

Sources for this answer:

- [Consolidated Directive (EU) 2024/1760, Article 2](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Supports the third-country Article 2 scope routes, including the EUR 450 million Union turnover threshold and ultimate-parent group route.
- [Directive (EU) 2024/1760, original Official Journal text](https://eur-lex.europa.eu/eli/dir/2024/1760/oj/eng?ref=sorena.io) - Provides the original CSDDD Article 2 structure and definitions used by the consolidated scope analysis.

*Recommended next step*

*Placement: after evidence section*

## Turn the scope test into an evidence file

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.

- [Open Research Copilot](/solutions/research-copilot.md): Check CSDDD scope questions against official source material.
- [Discuss CSDDD scope](/contact.md): Review non-EU turnover, group routes, and application-wave evidence with Sorena.

## Current Article 37 application waves after Directive (EU) 2025/794

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.

- 26 July 2028: Article 2(2)(a) and (b) third-country companies and groups with more than EUR 900 million Union turnover.
- 26 July 2029: all other Article 2(2)(a) and (b) companies within the EUR 450 million Union turnover scope threshold.
- 26 July 2029: Article 2(2)(c) third-country franchise or licensing route companies.
- Article 16 communication measures follow financial-year starts stated in Article 37: on or after 1 January 2029 for the 2028 wave, and on or after 1 January 2030 for the 2029 wave.

Sources for this answer:

- [Consolidated Directive (EU) 2024/1760, Article 37](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Shows Article 37 as replaced by Directive (EU) 2025/794, including the current 26 July 2028 and 26 July 2029 application dates.
- [Directive (EU) 2025/794 amendment marker in consolidated text](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Identifies the consolidated version as amended by Directive (EU) 2025/794 of 14 April 2025.

## Ultimate parent, designated subsidiary, and franchise/licensing routes

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.

- Non-EU group route: test consolidated Union turnover at the ultimate-parent group level against the EUR 450 million Article 2(2)(b) threshold.
- Non-EU franchise/licensing route: test EU royalties above EUR 22.5 million and EU net turnover above EUR 80 million, either for the company or the ultimate-parent group.
- Uniform-model condition: franchise or licensing agreements must ensure common identity, common business concept, and uniform business methods.
- Holding-parent exemption: document whether the parent only holds shares, which EU subsidiary is designated, what authority and resources it receives, and the supervisory-authority decision.

Sources for this answer:

- [Consolidated Directive (EU) 2024/1760, Article 2(2)(b) and 2(2)(c)](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Supports the third-country ultimate-parent and franchise/licensing scope routes, including EU royalties and EU turnover thresholds.
- [Consolidated Directive (EU) 2024/1760, Article 2(3)](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Supports the holding-parent exemption conditions, designated EU subsidiary route, and continued joint liability.

## Evidence records for a defensible non-EU scope conclusion

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.

- Union turnover workbook showing legal entities, Member State allocation, accounting basis, currency handling, and the financial years used for Article 2 and Article 37.
- Group consolidation record showing why the tested company is, or is not, the ultimate parent company and whether the group reaches the threshold on a consolidated basis.
- Franchise/licensing register showing EU royalty amounts, counterparties, contract territories, common identity, common business concept, and uniform business methods.
- Application-wave record mapping the final Article 2 route to either the 26 July 2028 Article 37 wave or the 26 July 2029 residual wave.
- Authorised-representative record with name, address, email, telephone number, accepted designation, and supervisory-authority notification evidence.

Sources for this answer:

- [Consolidated Directive (EU) 2024/1760, Article 23](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Supports the authorised-representative evidence record for third-country companies operating in a Member State.
- [Consolidated Directive (EU) 2024/1760, Article 24](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Supports the competent-supervisory-authority evidence record for non-EU companies with branches, no branch, or multiple branches.

## Common scope mistakes to avoid

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).

- Do not apply a non-EU employee threshold; Article 2(2) is based on Union turnover.
- Do not treat the EUR 900 million Article 37 wave threshold as the general scope threshold; the Article 2(2)(a) scope threshold remains more than EUR 450 million Union turnover.
- Do not ignore ultimate-parent consolidation when the tested company itself is below threshold but the group reaches the threshold.
- Do not place franchise or licensing arrangements into the ordinary turnover route without checking the Article 2(2)(c) royalty, turnover, common-identity, common-concept, and uniform-methods conditions.

Sources for this answer:

- [Consolidated Directive (EU) 2024/1760, Articles 2 and 37](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Supports the distinction between Article 2 scope thresholds and Article 37 application-wave thresholds.
- [Directive (EU) 2024/1760, original Official Journal text](https://eur-lex.europa.eu/eli/dir/2024/1760/oj/eng?ref=sorena.io) - Confirms the original legal baseline while the consolidated text shows the amended Article 37 timing currently in force.

## Primary sources

- [Consolidated Directive (EU) 2024/1760 after Directive (EU) 2025/794](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX%3A02024L1760-20250417&ref=sorena.io) - Primary source for the current Article 2 scope routes, Article 23 authorised representative rule, Article 24 supervisory authority rule, and amended Article 37 application waves.
  - Quote: "Amended by DIRECTIVE (EU) 2025/794"
- [Directive (EU) 2024/1760, original Official Journal text](https://eur-lex.europa.eu/eli/dir/2024/1760/oj/eng?ref=sorena.io) - Original Official Journal text for CSDDD terminology and scope structure before consulting the consolidated current Article 37 text.
  - Quote: "on corporate sustainability due diligence"

## Related 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 threshold FAQ](/artifacts/eu/corporate-sustainability-due-diligence-directive/faq/non-eu-turnover.md): How non-EU companies should assess CSDDD scope using EU-generated turnover, group thresholds, authorised representative records, and competent authority evidence.
- [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.


---

[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). All rights reserved.

Source: https://www.sorena.io/artifacts/eu/corporate-sustainability-due-diligence-directive/scope-waves-and-non-eu-turnover