Renting business premises: what to check

For a shop, café, office or workshop, the premises are often the biggest fixed cost. A lease ties you in for years, so read it carefully before you sign.

1. Who is the real owner?#

First, make sure the person offering the premises has the right to rent them out:

• ask for the ownership certificate from the cadastre, or proof of the right of use;
• if the owner is a business, check it on Kerko or at ARBK: status, official name and authorised persons. See How to check a business;
• if the property is jointly owned, e.g. by several heirs, you need all of them to agree or to authorise one of them;
• if the property is mortgaged, ask what happens to your lease if the bank takes it.

2. What the lease should contain#

• Parties: official names, NUIs or personal numbers;
• premises: address, floor area and cadastral parcel or unit number;
• permitted use: e.g. "restaurant", so there's no dispute if you need a permit for that activity;
• rent: amount, whether VAT is included, payment date and method (bank transfer);
• term and renewal option;
• rent increases: when and by how much;
• deposit: amount and conditions for return;
• running costs: electricity, water, heating, waste, building maintenance;
• repairs and fit-out: who pays for what, and what happens to your investment when you leave;
• termination: notice period and grounds for early termination.

3. Terms worth negotiating#

• A rent-free period during fit-out, typically one to three months for premises that need work.
• A term long enough to recover your investment. If you put €30,000 into a restaurant, a one-year lease is a big risk.
• The right to sublet or assign, in case you sell the business.
• A cap on increases, e.g. no more than inflation.

4. Withholding tax on rent#

When a business pays rent to an individual, it usually has to withhold tax from the rent, currently 9%, and file and pay it to ATK monthly. The owner receives the net rent.

Say clearly in the lease whether the amount is gross (tax withheld from it) or net (you pay the tax on top). The difference is roughly 10% of the rent. Filing is covered in Filing taxes in EDI.

If the landlord is a VAT-registered business, it invoices you with VAT, and withholding usually doesn't apply.

5. Permits for the premises#

Premises suitable for an office aren't necessarily suitable for a restaurant. Before signing, check that the premises can get municipal permits for your activity: ventilation, emergency exits, noise rules and similar. See Business licences and permits.

6. After signing#

• If your address changes, update it at ARBK. See Changing business details at ARBK.
• If you have a fiscal device, register it at the new address.
• Update the address on invoices, at the bank and on your Kerko profile so customers can find you.