Business Premises in an Apartment or Single-Family Home: What Are the Requirements?

Quick Overview

Operating a business from an apartment or single-family home is possible, but only if you comply with the rules under trade, building, and, where applicable, health and safety laws. The situation differs for quiet office work from home versus a hair salon, beauty salon, bistro, or auto repair shop. In practice, it is crucial to verify whether simply registering the business is sufficient or whether a change in the building’s designated use will be required.

Before you start a business from your apartment or house, check the following in particular:

• whether you must register the business with the trade licensing office,
• whether you have ownership or usage rights to the space,
• whether the activity requires health department approval, fire safety clearance, or structural modifications,
• whether you need the consent of the homeowners’ association, housing cooperative, or landlord,
• whether your business will unreasonably disturb your neighbors.

Not sure if your home-based business requires only a notification or also a change of use? We’ll help you assess your specific situation and prepare the necessary documents so that neither the authorities nor your neighbors catch you off guard.

What is a business premises

A business premises is a location where business activities are carried out. This can include, for example, offices, retail spaces, or workshops. As an entrepreneur, you may not have any business premises, or you may have several.

How does a business premises differ from a registered office?

A business premises is a specific physical location where the business activity itself is carried out. A registered office, on the other hand, is the address where the entrepreneur (a legal entity or a self-employed individual) is officially registered in the Commercial Register or Trade License Register.

It serves as the main administrative address and is the official address for communication with government authorities. In reality, business activities do not necessarily take place there. There are even virtual registered offices where the business owner merely registers their business and receives correspondence. Every business owner is required to have a registered office, and they can only have one.

You can therefore have a registered office practically anywhere. If you have a permanent residence there, nothing prevents you from doing so. Otherwise, you only need the property owner’s approval. On the other hand, you can’t just set up a business premises anywhere. Since business activities actually take place at the premises, stricter conditions apply to it.

In practice, we often see that entrepreneurs only address the issue of their business premises when neighbors complain or the trade licensing or building authority gets involved. Typically, these are situations where someone starts seeing clients in their apartment, sets up a beauty salon in a single room, or uses the garage next to their house as a workshop. Legally, however, it is not just a matter of whether the entrepreneur has a business license, but also whether the specific space is suitable and permitted for such an activity.

The most common mistake entrepreneurs make is confusing their registered office with their place of business. While you can often have your registered office in a location where you do not actually conduct business, your place of business must correspond to your actual activities. If you’re unsure whether your situation still qualifies as working from home or has already become a business premises, have a lawyer assess the situation before you start accepting clients or investing in renovating the space.

Basic Requirements for Establishing a Business Premises

Notification of a business establishment

Every newly established business (or its relocation or closure) must be reported to the Trade Licensing Office no later than three days before the start of operations. This also applies to the temporary closure of a business, in which case information about the closure must be posted in a clearly visible location.

Documentation of property rights

Proof of ownership or right of use of the property where the business is located must be submitted (e.g., an extract from the land registry or a lease agreement).

Business Premises Signage

Each business premises must be clearly marked with the entrepreneur’s name or the company name and identification number. If you plan to operate a retail store or offer services in an apartment or house, you must also specify the responsible person and the business hours. In the case of lodging facilities, you must also specify the category of accommodation.

Health Department Approval

If you plan to operate a business in the field of personal care or food service, for example, you must also obtain health department approval for the business premises. In this case, the premises must meet hygiene standards and specific conditions, such as the physical separation of different areas of the business.

Additional requirements

In addition to the above, it is important to provide appropriate facilities for any employees (cleaning room, changing area, restrooms with sinks and soap) and compliance with hygiene standards in all aspects of operations (washable and disinfectable materials, proper waste disposal) and fire safety measures.

Checklist: What to Check Before Setting Up a Business at Home

Before you start using an apartment or single-family home as a business premises, go through a few practical questions. If you don’t know the answer to any of them, it’s better to resolve the issue in advance rather than after an inspection by the authorities or a complaint from neighbors.

• Do you have ownership rights to the space, a lease agreement, or another legal basis for its use?
• Is the space suitable for the activities you intend to carry out there?
• Do you need to register the business with the trade licensing office?
• Do you need to change the building’s designated use?
• Does your activity require health department approval or compliance with specific health regulations?
• Will you be receiving customers, employees, or suppliers?
• Could the operation disturb neighbors with noise, odors, waste, or increased traffic?
• Do you need approval from the homeowners’ association, housing cooperative, or landlord?
• Do you have a written agreement on who will bear the costs of the construction modifications?

For some businesses, the details matter: how customers enter, operating hours, noise, waste management, or health and safety requirements. We’d be happy to help you check which obligations apply specifically to your business and prepare the necessary documentation for the authorities so you don’t risk a fine or a business shutdown unnecessarily.

Specifics of Operating a Business in an Apartment or Single-Family Home

If you plan to open a business in an apartment or house where you also live, you will likely be affected not only by general requirements but also by the need to change the building’s designated use. Every building has a designated purpose for which it was approved. In the case of an apartment or single-family home, this will most likely be a building intended for residential use.

Therefore, if you wish to run a business from home, you will need to have it converted into a non-residential space. This may also involve the need for structural modifications (e.g., installing plumbing in a room where you plan to operate a beauty salon).

At the same time, it’s also good to keep your relationships with your neighbors in mind. Some types of businesses can have an impact beyond the boundaries of your premises (for example, noise from a car repair shop you plan to set up in an unused garage attached to your single-family home). It is always better to reach an agreement with your neighbors and take measures that will minimize the negative impacts of your business as much as possible. Otherwise, an angry neighbor could cause you problems.

In practice, the biggest problem is often the impact on the surrounding area. Authorities and neighbors will view an accounting office, where a single client occasionally visits, differently than a business where customers come and go, generating noise, odors, waste, or increased vehicle traffic. The law does not provide a single, simple threshold here, so it is always necessary to evaluate the specific activity, the intensity of operations, and the nature of the building.

Change of Use for a Single-Family Home

To change the intended use of a property, you must submit an application to the local building authority. The application should include a specification of the new intended use (in this case, non-residential space for a business), a description of the planned activities you will carry out, and, if applicable, technical documentation.

The municipality’s zoning plan also plays a role. If changing the building’s designated use to non-residential space is not in accordance with the zoning plan, we have bad news for you. While you can request a change to the zoning plan, in practice this will most likely be a process lasting several years with an uncertain outcome.

The local building authority may issue the permit immediately, or it may require you to meet certain technical requirements that will necessitate structural modifications. These typically pertain to safety, health standards, and infrastructure (electricity, water, sewage, etc.). In this case, a building permit process will be initiated, and only once the conditions are met will the authority issue approval for the change of use.

Other authorities affected by the change in the building’s use also provide input. Typically, these include health and safety officials or the fire department, who verify compliance with health and safety standards and fire safety measures. An environmental impact assessment of the change in use may also be required.

Change in the intended use of an apartment

The situation is somewhat more complicated for an apartment. This change affects not only you but also the owners of the other apartments in the building (unless you own the entire building). In this case, your neighbors—that is, the homeowners’ association or housing cooperative—must approve the change in the apartment’s use.

Real-life example: a beauty salon in an apartment

A client wanted to operate beauty services in one room of her apartment. Originally, she had only planned to expand her business and register the business with the trade licensing office. However, during an inspection, it turned out that she would also need the association’s consent, an assessment of hygiene requirements, and modifications to the space to ensure it met the needs of the planned activity. If she had started providing services without taking these steps, she would have risked not only a dispute with her neighbors but also intervention by the authorities. It is therefore better to resolve such situations before purchasing equipment and promoting services.

Business Premises in a Rented Apartment

If you plan to set up a business in a rented apartment, you will need to take all the steps listed above and, in addition, obtain permission from the apartment owner (landlord). Even if you manage to arrange everything, you’re not out of the woods yet. A dark cloud in the form of lease termination will still hang over you. In this case, you’ll have to leave the apartment and lose your business premises—regardless of the tens of thousands you’ve invested in renovations and building your reputation.

Summary

A business premises is the place where an entrepreneur actually conducts their business, unlike the registered office, which serves only as an official address. Establishing a business premises requires filing a notice with the trade licensing office, providing proof of ownership or lease rights, identifying the premises, and in some cases, obtaining health department approval and meeting safety requirements.

If the business premises are to be established in an apartment or a single-family home, it is often necessary to change the building’s designated use to non-residential space, which may involve structural modifications. For apartments in apartment buildings, the consent of the homeowners’ association or housing cooperative is also required. In the case of a rented apartment, the landlord’s permission is required, and there is a risk of the lease being terminated.