Create an Alojamento Local in Portugal

Every year, many people come to expatriate and live in Portugal. Many of them are already retired and come here to enjoy all that Portugal has to offer. However, many also come to undertake, even at the time of retirement, to live but have something to do (Or also to have an extra income). This is why many expatriates come to create an Alojamento Local. I will explain here what is an Alojamento Local, how to create it and what are the rules to respect.

If you wish to be accompanied by an English-speaking accountant installed in Portugal for the creation of a company and an Alojamento Local in Portugal, use the contact button in the side column. You will be contacted within 24 to 48 hours by an expert accountant with whom you can discuss your project and who will be able to accompany and advise you throughout the procedure.

What is an Alojamento Local?

Alojamento Local is a collective name for a number of types of accommodation provided for vacation rental. It can be:

• Rooms in your house (Bed and Breakfast), with or without breakfast
• Apartments or individual houses
• Hostels that also fall under the denominator Alojamento Local

The most common names are Bed and Breakfast, guesthouse, vacation villa, apartments and youth hostel and all their variants.

Do not confuse an Alojamento Local with a Casa do Campo. A Casa do Campo is part of Turismo no Espaço Rural which also includes Agro-Turismo and Hotéis Rurais. Sometimes a Casa do Campo can offer a solution if you do not qualify for an Alojamento Local. In a Casa do Campo there are more possibilities but also more rules and obligations.

Open an Alojamento Local in Portugal

If you want to open an Alojamento Local in Portugal, you will need an AL license, a permit. This also applies to a Casa do Campo, but here we will focus on the Alojamento Local. The conditions, rules and application procedures are very different for these two Portuguese structures.

An AL license can be requested at the câmara of your city. Of course, you will need to have the necessary papers for this application and there are conditions that the accommodation must meet. You will also have to declare your activity to the Finanças (which is the same administration where you can get a Portuguese TIN). You can declare your activity as a self-employed person, but also as a Lda (Type of company in Portugal). The choice you make will depend on your expected turnover, as freelancers are limited in turnover in Portugal.

I can’t repeat it enough: it is best to go to an accounting firm that knows all the regulations of the Alojamento Local in Portugal and that will be able to guide you in the choices that will be adapted to your situation.

Requirements to create a Portuguese Alojamento Local

A particular point in Portugal is the power that the condominium may have over your Alojamento Local:

• If you open your establishment in a building, then you must have the permission of the other tenants
• If half of the tenants object to the accommodation after repeated disruptive events, your establishment can be closed
• The other tenants of the building can demand that you contribute more to the common expenses: 30% more maximum

To start with, you will need to prove that you are a Portuguese property owner. If there are several of you who bought it, then you will need to have their permission to use the property for economic purposes such as seasonal rental. If you are renting a property, the owner must give you permission to create an Alojamento Local. This of course only applies if the activity is registered in your name only.

It can be seen from time to time in Portugal that some parts of the house (e.g. swimming pool) or outbuildings have not yet been legalized by the city hall. In this case, you will not be allowed to create your Alojamento Local and you will have to make sure that all the buildings are legalized and that the construction plans are correct. This can save you additional costs and especially trouble with the Portuguese administration.

Secondly, and more importantly, just because a property has a permit to be lived in does not mean that it can automatically be rented. There are building and planning regulations for your Alojamento Local in Portugal:

• To present adequate conditions of conservation and operation of the installations and equipment
• Have hot and cold water
• Have a window or balcony with direct communication with the outside
• Have adequate furniture, equipment and utensils
• Have a system to block the entry of outside light to ensure adequate ventilation and airing conditions
• Ensure that doors are equipped with a security system to guarantee the privacy of users
• Sanitary facilities equipped with a security system that guarantees the privacy of the tenants
• Always respect the conditions of hygiene and cleanliness
• Buy the Alojamento Local nameplate of Portugal
• Have a complaint book and an information booklet both visible
• Inform the Foreigners and Borders Service about the accommodation of foreigners

Local lodging facilities must also meet safety requirements. If they have a capacity of 10 people or less, they must have:

• Fire extinguisher and fire blanket accessible to users
• First aid equipment accessible to users
• A national emergency number (112) in a location visible to users

If the capacity is greater than 10 people, must comply with the rules against fire according to legislation: Legislative Decree No. 220/2008 and Order No. 1532/2008.

Beware, Portugal is looking to increase control over short term rentals and it is quite possible that you will have to face several controls. You may have to pay fines:

• For a lack of your nameplate: fine between 50 euros and 750 euros for a natural person and between 250 euros and 7500 euros for a legal person.
• For failure to comply with safety regulations: fines between 125 euros and 3,250 euros for a natural person and 1,250 euros to 32,500 euros for a legal entity.