Key Questions to Ask Before Buying Commercial Property in Portugal

Buying commercial property in Portugal — whether it’s a restaurant, shop, warehouse, or multi-use unit — is a serious investment. While the Algarve is a popular destination for business-minded expats and entrepreneurs, commercial real estate comes with risks that go beyond what you’d face in residential purchases.

Before you sign a promissory contract or make a deposit, there are several essential questions you should ask. These will help you avoid zoning issues, licensing problems, hidden liabilities, and unexpected legal limitations that could stall or ruin your business plans.

1. What Is the Legal Use of the Property?

✅ Ask for:

• Licença de Utilização (Usage License)
• Caderneta Predial (Property Tax Document)

The approved use must match your intended activity — e.g., Comércio for shops or cafés, Serviços for offices or studios, Armazém for storage, and Indústria for production.

🛑 Never assume you can change the use later. Zoning changes are possible but complex and not guaranteed.

2. Is the Property Currently Licensed and Operating?

If the business is operating (restaurant, shop, etc.), ask:

• Is the Licença de Funcionamento (Operating License) active?
• Can it be transferred to the new owner?
• Is the license in the current owner’s name?

🚩 Be cautious if the license has expired or the property is operating without one. Transferring or reactivating may involve upgrades, inspections, or legal hurdles.

3. Is the Building Part of a Condominium?

If the property is part of a shared building, ask:

• Are there condominium rules limiting commercial activity?
• Are there restrictions on opening hours, noise, signage, or deliveries?
• What are the monthly condominium fees and responsibilities?

Condos can restrict restaurants, bars, or loud businesses — even if the property is legally classified as commercial.

4. What Permits Will I Need to Operate My Business?

Depending on the activity, you may need:

• Food safety and hygiene certification (restaurants, cafés)
• Fire and acoustic reports (gyms, bars, studios)
• Alcohol license (if selling)
• Terrace license (for outdoor seating)

✅ Even if a property seems “ready,” always ask what needs to be renewed, updated, or declared again in your name.

5. Are There Any Hidden Structural or Compliance Issues?

Ask whether the unit:

• Has sufficient ventilation, water pressure, and drainage
• Is accessible for disabled clients (required for many businesses)
• Is compliant with fire exits, alarms, extinguishers, and signage
• Has updated electrical installation and power capacity

Get a professional survey or technical inspection before buying, especially for older units or converted properties.

6. Will the Sale Include Equipment or an Operating Business?

If you’re buying a commercial unit with a current business:

• Is the business registered as a company or sole trader?
• Will you take over employees or liabilities?
• Is the equipment legally installed and certified?

Consider a business acquisition advisor or lawyer — buying a company is very different from buying real estate.

7. Are There Municipal Restrictions in the Area?

Some Algarve municipalities have:

• AL containment zones (affects short-term rentals)
• Noise control or nightlife regulations
• Historic protection zones with design or usage limitations

Check with the Câmara Municipal to see if your activity is allowed in that specific area or building.

8. What Are the Tax and Accounting Obligations?

Commercial property ownership and operations usually require:

• VAT registration (especially if renting or leasing)
• Fiscal representation for non-residents
• Certified invoicing systems
• Bookkeeping and corporate tax filings if using an LDA

💡 Hire an accountant familiar with commercial and international clients to avoid fines or compliance issues.

9. Is the Property Already Leased? Can I Vacate the Tenant?

If you’re buying an occupied commercial unit:

• What’s the lease duration and notice period?
• Is the tenant paying market rent?
• Are you allowed to terminate the lease or renegotiate?

Buying with a tenant in place may be ideal for investors — but not for owner-operators who want to use the space.

10. What’s the Exit Strategy?

Before buying, think about:

• Who would want to buy this from you later?
• Is the area growing or declining in foot traffic or tourism?
• Can the space be easily adapted to other commercial uses?

Commercial property resale depends heavily on zoning, visibility, and demand — not just size or condition.