In recent years, with the boom in tourism in Portugal, opening local accommodation has become a very lucrative economic activity and, consequently, one that is much sought after by the Portuguese. After all, there are many stories of people who have become rich just by renting out their homes to foreigners. But is that really the case? 

Yes and no. I mean, opening local accommodation has a lot of potential, but it's dependent on a number of factors, like practically all branches of business. However, no accommodation is successful without a lot of hard work and dedication involved. Many entrepreneurs think it's just a matter of equipping a house or apartment and putting it on the market.  

In fact, there are many bureaucratic and fiscal requirements. Not to mention all the logistics and, of course, digital marketing issues. But let's go step by step. Do you want to open a local accommodation? Then here's how to proceed. 

What is local accommodation? 

Before we begin, it's important to understand what we're talking about. After all, what is local accommodation? According to the official definition laid down in Portuguese law, this is an establishment that provides temporary accommodation services, particularly for tourists, but not only, for a fee. However, it cannot have the requirements of a tourist resort, such as a hotel, guest house or pousada. 

How to register local accommodation? 

With the aim of streamlining the bureaucratic process, the government has created the Balcão Único Electrónico, where entrepreneurs can start their various businesses. Local accommodation can also be registered here, subject to prior notification. This process takes between 10 and 20 days and, once completed, you will be given a registration number, which will be the valid title for your establishment to open to the public. 

When making the request at the Single Electronic Counter, you must attach the authorization to use the property, the identification of the owner of the local accommodation (whether an individual or a company), their address, the business name adopted by the establishment, the number of beds, rooms and guest capacity of the space and their contact details. You should also attach a copy of the identification card or permanent certificate of commercial registration, a term of responsibility, the land registry, a lease agreement if you are not the owner, a declaration of the start of activity at the tax office and, if your local accommodation is in a building, the minutes of the condominium owners' meeting that approved its installation. 

What do I need to open the door to the public? 

Once this bureaucratic procedure has been completed, there are only a few steps left to take to open your local accommodation to the public. First of all, if you haven't already done so, you need to register with the tax office. Income from local accommodation is taxed under category B (business and professional income) or category F (property income). It is advisable to hire an accountant to ensure your annual accounts, even if you are an individual. 

Next, your local accommodation must meet certain legal requirements. To begin with, it must have water, electricity and be connected to the public sewage system, of course. It must be properly equipped and furnished, as well as meeting all hygiene and cleaning conditions. To do this, it's best to hire a cleaning company that can regularly visit the establishment to ensure this for the comfort of guests. 

It must also comply with all safety requirements in accordance with the law in force. For this, you need to have a fire extinguisher, fire blanket, first-aid kit and the national emergency telephone number clearly visible to all guests. It's best to consult the relevant law before calling the police. Last but not least, don't forget to display information in several languages, provide a complaints book and take out civil liability insurance.  

What taxes will I pay? 

Operating local accommodation means you have to pay specific tax obligations. You should have an invoice program so that you can issue receipts for all your expenses. Once again, you will need the help of a certified accountant. 

You need to pay VAT every year, although you will be exempt from this tax if, in the previous tax year, you did not exceed 13,500 euros in income. If your local accommodation is present on international online platforms, such as AirBnB or Booking, you must also submit model 30, which concerns income paid to non-residents, every second month after your payment to these sites. 

Consult specialized help if in doubt. Accountants are the professionals qualified to provide all the clarifications in this field. The tax side is very important in any business, and local accommodation is no different. You should always comply with your obligations, as failure to do so usually has very painful repercussions.