Real estate construction in Portugal is an activity allowed to any Portuguese or foreign citizen. However, it is a highly regulated activity and in accordance with European guidelines.

In very general terms, the real estate construction procedure has three main stages: (1) planning stage, (2) construction stage and (3) final license.

1 – Planning Stage

In Portugal, there are special laws (land management programs) that establish what can be built/changed/extended in the Portuguese territory. Land management programs are divided into national, regional, local and detail of a small geographic area, and may also be general or special. Considering the complexity of these plans and laws, we recommend hiring a competent and specialized professional in this matter, to check what is allowed to build and what the legal conditions are.

Next, the real estate developer must hire an architect to prepare the architectural projects to be presented to government entities, as well as engineers and other specialized technicians. Usually, architects already have a full team and accept the responsibility of coordinating all construction projects, which makes the whole process much easier.

Once the construction project has been approved, the property developer must pay the building permit fee, which is generally valid for one year. The real estate developer will also have to show the administrative authorities proof of payment of civil liability insurance.

2 – Construction Stage

At this stage, the real estate developer must hire a general contractor (or several contractors from the various sectoral areas) to build the property.

All contractors are required

to be registered and licensed with the Portuguese Government, as well as having valid insurance for workers’ accidents and civil liability insurance. It is also mandatory to hire a company specialized in safety and working conditions, to ensure that Portuguese law is complied with and thus avoid accidents during construction.

It is also very important to sign a written contract with each contractor, ensuring that Portuguese law is complied with and, in this way, the real estate developer is safe if there is a problem.

If the real estate developer wants to be even more safe from technical problems and poor construction execution, he can hire a construction inspector (usually an architect or

engineer with extensive experience). The inspector will monitor the entire execution of the work, making periodic reports and warning to the contractor.

The construction director (usually the contractor in charge) will make official reports in a “Workbook” which is an official record for any government entity to control what is done in the construction.

3– Final License Stage

Once the construction is finish, the real estate developer will have to inform the government entities that the property is completely built and apply for the final license.

Government entities may inspect the property before issuing the use permit. Government entities may also grant the license without inspecting the property, but in this case, the construction director will have increased responsibility for the fulfillment of the projects and the proper execution of the construction.

Only after the final license, the real estate developer can request the supply of water, electricity, gas etc., as well as rent or sell the property.

For certain more specific or differentiated properties, there will be different specific legal procedures to comply with.