Madeira’s strategic Atlantic location, EU stability, and investor-friendly tax environment make it an attractive destination for entrepreneurs looking for a business for sale in Madeira. Whether acquiring a restaurant, retail space, or service company, success depends on careful due diligence and compliance with Portuguese law.
This guide explains the legal, fiscal, and regulatory checks foreign investors must perform before buying a business or commercial property in Madeira.
1. Understand What You Are Buying
In Portugal, buying a “business” can mean either:
- Asset acquisition — purchasing commercial property, equipment, or a specific activity; or
- Share acquisition — acquiring the shares of an existing company.
Each route has different legal and tax implications. Asset deals require real-estate and licensing verification, while share deals demand corporate, accounting, and tax due diligence.
2. Legal Framework: National and Municipal
Commercial real estate and business acquisitions in Madeira are regulated under:
- Regime Jurídico da Urbanização e da Edificação (RJUE) — governing building permits, usage authorisations, and property legality.
- Municipal Regulations — defining occupancy rules, safety conditions, and local licensing.
- Civil Code and Commercial Companies Code — establishing ownership, contract, and corporate rules.
These frameworks ensure that the property, premises, and activities comply with urbanistic, safety, and commercial standards before transfer.
3. Property and Title Verification
For acquisitions involving real estate, start with a registral due diligence:
- Obtain a Certidão Permanente do Registo Predial, which confirms ownership, description, and existing encumbrances (mortgages, liens, or usufructs).
- Check the Caderneta Predial (tax registry) and ensure consistency between the registry, cadastral records, and physical layout.
- Confirm there are no unresolved inheritance rights, co-ownership disputes, or judicial actions.
If any discrepancies arise, request administrative justification or updated registration before signing a promissory contract (contrato-promessa).
4. Verify Urban and Usage Legality
Every commercial space must have a valid Autorização de Utilização (Usage Authorisation) that matches its intended use, which can be retail, hospitality, or services.
For older buildings, confirm that the use remains lawful and that no subsequent works have triggered the need for new authorisation. When absent or unclear, your lawyer should request a certidão de legalidade urbanística confirming compliance with the RJUE.
5. Licenses, Condominium, and Technical Compliance
If the property is part of a horizontal condominium, review:
- The Deed of Horizontal Property Constitution and Condominium Regulations;
- Permitted uses of each unit; and
- Restrictions on business hours, signage, noise, or structural works.
For hospitality, food, or medical uses, check for sector-specific licenses such as hygiene, noise, and accessibility certificates.
A technical inspection should verify:Structural and electrical safety;
- Gas and ventilation systems;
- Fire protection and emergency exits;
- Accessibility and load-bearing compliance.
These steps ensure your future business meets all safety and municipal standards.
6. Review Existing Contracts and Leases
Many businesses for sale in Madeira operate from leased spaces. Always:
- Review existing lease agreements and registered subleases;
- Verify renewal rights, rent amounts, and termination clauses;
- Confirm the landlord’s consent for assignment, if required; and
- Check occupancy conditions and hand-over status at closing.
Unregistered leases or unapproved subleases can affect your ability to operate or resell the business.
7. Tax and Municipal Costs
When buying a commercial property or the assets of a business, expect the following taxes:
- IMT (Property Transfer Tax): generally 6.5% for commercial property. Exemptions rarely apply outside housing programs.
- IMI (Municipal Property Tax): 0.3%–0.45% of the property’s tax value (VPT).
- Stamp Duty: 0.8% of the declared price.
- VAT (IVA): may apply to commercial properties or renovations; confirm with your accountant whether the sale is VAT-exempt or taxable.
Municipal fees: advertising licenses, signage, or terrace usage may also require payment.In Madeira, regional income tax rates are lower than in mainland Portugal, offering legitimate savings once operations begin.
8. Energy and Environmental Requirements
Before completion, request:
- A valid Energy Performance Certificate (Certificado Energético) stating the building’s energy class;
- Proof of insurance (seguro multirriscos) adequate for the business activity; and
- Confirmation of environmental compliance, particularly for former industrial or workshop sites.
These documents protect buyers against hidden liabilities and ensure compliance with EU-mandated efficiency standards.
9. Regulatory and Municipal Risks
Madeira’s municipalities apply additional local rules for certain commercial activities.
- Restaurants and cafés require noise and ventilation control;
- Health and wellness clinics must meet hygiene and accessibility standards;
- Entertainment venues face restrictions on opening hours and crowd limits.
If your business changes the original activity (for example, converting a retail shop into a restaurant), you will need updated use authorization and sectoral licenses.
10. Documentation Checklist
Before signing, your lawyer should collect and review at least:
- Land Registry Certificate (Certidão Predial) and
- Tax Record (Caderneta Predial);
- Usage Authorization (Autorização de Utilização);
- Condominium statutes and relevant meeting minutes;
- Technical inspection report and energy certificate;
- Existing leases and subleases;
- Insurance and compliance certificates for electrical, gas, and fire safety systems.
A robust documentary review is critical to avoid hidden liabilities or operational restrictions after acquisition.
11. Professional Coordination and Due Diligence
Buying a business for sale in Madeira is not only a financial transaction, it is a regulatory process. Proper due diligence requires collaboration between lawyers, accountants, engineers, and tax advisers.
The goal is to confirm:
- Clear ownership and registration;
- Urban and technical legality;
- Valid business licenses and permits; and
- Accurate financial and tax compliance.
Only after these checks should you proceed to the promissory purchase contract, including conditions precedent and clear warranties.
12. Why Foreign Buyers Choose Madeira
Madeira’s combination of EU legal security, lower personal and corporate tax rates, and a high quality of life make it an ideal base for business owners.
The island’s International Business Centre (MIBC) provides one of Europe’s most competitive corporate tax environments (5% for qualifying companies), while the general regime remains moderate (i.e. 14% corporate tax rate) and fully OECD-compliant.
For investors relocating from abroad, Madeira offers not only a profitable location but also professional infrastructure, legal, accounting, and banking, with decades of experience assisting international entrepreneurs.
Professional Assistance concerning Business for sale in Madeira
Before committing to any business for sale in Madeira, ensure your transaction is fully compliant and tax-efficient.
Madeira Corporate Services (MCS) and its independent lawyers offer complete support for business acquisitions:
- Legal and urbanistic due diligence;
- Tax and accounting structuring;
- Assistance with registration, licensing, and compliance; and
- Ongoing representation before local and national authorities.
Please feel free to contact us if you are considering acquiring or investing in a business in Madeira.
The founding of Madeira Corporate Services dates back to 1996. MCS started as a corporate service provider in the Madeira International Business Center and rapidly became a leading management company… Read more
