Australia Belgium China
Is a trading licence required for a retail operation? No. Yes, a socio-economic permit is required for all net sales areas above 400 sq. m. Yes. Generally, there are 2 ways to do retail business in China: (1) self-operated stores, in which case the company needs a retail permit; and (2) cooperation with shopping malls, in which case the company need only have a wholesale permit.
How is a new retail business normally set up? Typically by acquiring a new lease or taking over an existing lease in a desirable location. Typically by acquiring a new lease or taking over an existing lease in a desirable location. Typically, by setting up a trading company with wholesale and retail permits covering any administrative offices as well as the retail store(s) as branches.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No. Such payments are, in effect, illegal. No. Such payments are, in effect, illegal. No. This is not common but it is common to pay a deposit (or earnest money) to a landlord to secure premises before a definitive lease is entered into.
Does a special legal regime apply to retail leasing or operation? Retail property is governed by specific legislation in each state (eg Retail Leases Act 1994 (New South Wales)). Yes, the Belgian Civil Code was changed in 1951 when a new section specifically regulating commercial lease agreements (retail leases) was added. No.
How long is a typical new retail lease? 5 years. All States except Queensland require a minimum of 5 years unless an exemption is obtained from the tenant. 9 years. A retail lease may not be concluded for less than 9 years. The tenant may terminate the lease at the end of each 3 year period. There is no restriction on common retail lease terms but the maximum would be 20 years.
How common is a turnover-based rent? It is common to have a mixed rental (base rent plus turnover rent). In malls, in most cases, the rent corresponds to a percentage of the turnover with a minimum guaranteed rent. Outside malls turnover rents are uncommon. Very common for retail businesses.
Does the level of rent tend to be fixed or will it increase? Rent normally increases annually on each anniversary of the commencement date by either CPI or a fixed percentage and is adjusted to market rent at the start of the option term. In most cases the rent is indexed yearly. Rents will usually increase in line with the market rent but it is common for a lease to limit increases to a maximum percentage.
Is it normal for a new tenant to provide some form of security or guarantee to the landlord? Lease agreements usually provide for a 3 or 6 month guarantee in the form of a deposit or a bank guarantee. Personal guarantees are sometimes also required. Lease agreements usually provide for a 3 or 6 month guarantee in the form of a deposit or a bank guarantee. Yes – by paying security deposit (which will be refunded twice over if there is breach by the landlord) or earnest money which only serves the purpose of showing the tenant's good will.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes. Real estate must be authorized for general retail use. The specific form of retail use is not normally restricted by law. Yes. Real estate must be authorized for retail use. Yes. Retail is included in "commercial use" in terms of zoning land use rights.
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? Leaving aside competition issues that are unlikely to apply in the case of one retail location, this is legal. The exclusion from a location of a certain permitted use by competitors is a common practice. Non competition clauses pursuant to which a landlord undertakes to a tenant not to let premises to third parties carrying on the same activity as the tenant are valid in most cases. There is no specific restriction. Leases are subject to negotiation but general rules on "unfair competition" or "fraud" apply to leases.


Czech Republic France Germany
Is a trading licence required for a retail operation? Yes. Yes, for premises which are larger than 1,000 sq. m. No.
How is a new retail business normally set up? A new retail business is usually set up by acquiring a new lease or taking over an existing lease. Strong domestic and foreign retail operators from time to time acquire existing businesses or franchise whole retail units. Typically by acquiring a new lease or taking over an existing lease in a desirable location. Typically by entering into a new lease or taking over an existing lease in a desirable location.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No, but under the new Czech Civil Code, compensation may be payable to the previous tenant. It is quite rare. Usually, the landlord will try to negotiate a rent increase and/or an extension to the term of the lease. No.
Does a special legal regime apply to retail leasing or operation? No. More generally, a special legal regulation applies to leases of non-residential premises. This special regulation will be removed as of 1 January 2014 with the new Civil Code coming into force. Yes, the commercial lease statute provided in the Code de commerce is applicable and many provisions are mandatory. Standard German tenancy law pursuant to the German Civil Code applies. There is no specific retail legislation but the courts may control the terms of any commercial lease under the general provisions of the law dealing with standard terms and may declare certain onerous contractual terms void.
How long is a typical new retail lease? Between 5 and 10 years. Between 9 and 12 years. Unless, it waives its right, the tenant may terminate the lease at the end of each 3 year period. The initial term often is 10 years. In such cases two options for the tenant to extend (of 5 years each) are common.
How common is a turnover-based rent? Turnover-based rent is common in large malls, where the rent tends to be divided into a minimum basic rent plus an agreed percentage of turnover. It is not common to have turnover-based rent outside malls. In malls, in most cases, the rent corresponds to a percentage of the turnover with a minimum guaranteed rent. Outside malls turnover rents are uncommon. In malls, the rent will frequently correspond to a percentage of the turnover with a minimum guaranteed rent. Outside malls turnover rents are not very common.
Does the level of rent tend to be fixed or will it increase? It is common for rents to be indexed annually in line with a relevant inflation index – either the Eurozone or EU 27 HICP or the Czech Statistical Office CPI. In most cases the rent is indexed yearly. In most cases the rent is indexed yearly, often by reference to the consumer price index (Verbraucherpreisindex).
Is it normal for a new tenant to provide some form of security or guarantee to the landlord? New tenants usually provide a security deposit amounting to 3 or 6 months' rent. Parent company guarantees are acceptable if the group is reputable. Very strong retailers – primarily leading food retailers – may not have to provide security. Lease agreements usually provide for a deposit equal to 3 months rent. In addition, in many cases, landlords demand a bank guarantee covering one year's rent. Lease agreements usually provide for a guarantee amounting to 3 months rent including service charges, in form of a deposit or a bank guarantee.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes. Real estate must be authorized for retail use. Yes. Real estate must be authorized for retail use. Yes. Real estate must be authorized for retail use.
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? Such a provision may breach competition law, however each case should be considered individually. In reality, such agreements are fairly common. Non competition clauses pursuant to which a landlord undertakes to a tenant not to let premises to third parties carrying on the same activity as the tenant are valid in most cases. Non competition clauses by which a landlord undertakes to a tenant not to let premises to third parties carrying on the same activity as the tenant within a certain radius are valid in most cases.


Hong Kong Hungary Italy
Is a trading licence required for a retail operation? No. Yes. An operating permit must be obtained from the local municipality. Yes.
How is a new retail business normally set up? Typically by acquiring a new lease or taking over an existing lease in a desirable location or by entering a dealership agreement with shopping mall landlord. There is currently a high vacancy rate in Hungary in shopping malls and in desirable city locations. Start-ups normally involve entering into a new lease. Typically by entering into a new property lease contract or a "going concern" lease contract (commonly used in malls since "umbrella" trade authorizations are issued). On-street locations may be acquired through the assignment of existing contracts from existing tenants on payment of a premium.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No. No. Entry into desirable on-street and other prime locations could involve the payment of a premium.
Does a special legal regime apply to retail leasing or operation? No. Yes retail leases are governed by the Civil Code and by a special Lease Act which provides quite a high level of protection tenants' interests. Property lease contracts are subject to the special regime laid down by Law 392/1978. Going concern lease contracts are subject only to civil code provisions.
How long is a typical new retail lease? Between 3 and 7 years. Currently not longer than 5 years with a break option and an option to extend. Property lease contracts must have a minimum term of 6 years, automatically renewed for further periods of 6 years unless one party gives 12 months notice that it will not renew (the landlord's right to refuse renewal after the initial term are limited). Going concern lease contracts normally have terms ranging from 5 to 15 years.
How common is a turnover-based rent? For retail leases, it is common to have a mixed rental (base rent plus turnover rent). Currently rents are turnover based in many places. Tenants can easily avoid an obligation to pay a minimum amount of fixed rent. Going concern lease contracts usually provide for both turnover based rents and minimum guaranteed fixed rents (subject to adjustments in line with the COL index). Property lease contracts normally provide for fixed rents, although turnover based rents are not prohibited by law.
Does the level of rent tend to be fixed or will it increase? Rents normally increase at an agreed percentage every year during the fixed term but are adjusted to the open market rent during any optional extension term. The rent tends to remain the same or possibly decline slightly, due to the high vacancy rate. Rents are usually subject to annual adjustment based on a certain percentage (depending on the lease term, from 75% to 100%) of the change in the cost of living index during the previous year.
Is it normal for a new tenant to provide some form of security or guarantee to the landlord? The rental deposit for retail tenants is normally equal to three months' rental, management fee, air-conditioning fee and one quarter of the government rates and/or government rent and can be paid by way of cash or bank guarantee. Landlords typically ask for a security deposit or bank guarantee for three months rent and service charge plus VAT. Yes, although Italian law limits the amount of cash deposits to 3 monthly instalments of rent. Bank guarantees are normally requested. Parent company guarantees might be accepted by landlords only for leading international operators.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes. Leased property must be permitted for general commercial use. The specific form of retail use is not normally restricted by law. No. Yes. Zoning and other public laws restrict the setting up of retail operations (or require filing/permits to be obtained).
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? This may be against competition law but the law in this area came into effect only in 2013 and it is not yet clear what effect it will have. This is legal. The exclusion of a certain group of competitors from a location is a common practice. Yes.


Netherlands Norway Poland
Is a trading licence required for a retail operation? No No trading permits are required specifically to establish a retail operation. No
How is a new retail business normally set up? Typically by acquiring a new lease or taking over an existing lease in a desirable location. A new business is normally set up as a new limited liability company which takes a new lease, or takes over an existing lease agreement. In general by acquiring a new lease or by acquiring the real property where a retail mall is to be developed in a desirable location. Franchise networks are being developed major retailers who are already in the market.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No. It is more common to pay a premium to the existing tenant. No, this is not common. No.
Does a special legal regime apply to retail leasing or operation? A special regime applies to retail leases and leases of hotels. It is not possible to include terms in leases of retail property which differ from those laid down by regulations to the prejudice of the tenant without the approval of the court. There is no specific legislation other than that governing all commercial leases. No.
How long is a typical new retail lease? 5 years plus 5 years. Normally 10 years with an option for additional 5, but anything between 5 and 10 years is not unusual. Typically 5 or 10 years.
How common is a turnover-based rent? Turnover-based rent is common. This is quite common especially in malls, but subject to a minimum rent level. Very common. Rent in malls is usually partly basic rent and partly turnover-based rent.
Does the level of rent tend to be fixed or will it increase? In most cases the rent is indexed yearly. In addition both parties have the right to ask for a new rent to be set at the end of the first rent period and again 5 years later. If the rent is not turnover based, it will always be fixed but subject to adjustment annually in line with the Consumer Prices Index. It is common practice for leases to include provisions effecting yearly indexation of the rent.
Is it normal for a new tenant to provide some form of security or guarantee to the landlord? Yes, a bank guarantee of 3 months rent or a parent company guarantee. Yes, all tenants are expected to provide either a guarantee or a deposit for a minimum of 6 months' rent. Yes, it is standard practice for landlords to require some form of security, typically for 3 months' rent. Bank guarantees, deposits, or a notarial deed involving voluntary submission to enforcement proceedings are all fairly common.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes. Real estate must be authorized for retail use. Yes, but in general this is mostly an issue affecting malls. Any area in which retail business is to be operated must be appropriately zoned. If there is a local zoning plan which governs the area, any investment should be conducted strictly in accordance with the provisions of the zoning plan. If the area is not covered by a zoning plan the investment may be commenced on the basis of a zoning decision.
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? This may be against competition law, but for an initial 7 year period it is permissible to make restrictive arrangements regarding the use of the units in a shopping centre. A non-compete clause is quite common in malls and is legally permissible. Many retail leases include provisions prohibiting landlords from leasing other units in the same mall to competitors of the tenant or retailers offering similar merchandise. These provisions have become standard in large malls, but must always be assessed from an anti-trust perspective.


Portugal Romania Russia
Is a trading licence required for a retail operation? In general terms, no trading permit is required for a retail operation. However, specific activities require may require a permit (e.g. pharmacies). All companies need to be registered and authorized in order to carry on commercial activities, including retail operations. Depending on the specific retail sector, additional permits/authorizations may be required. No.
How is a new retail business normally set up? Normally by acquiring a new lease or sublease in a desirable location. Purchasing real estate or acquiring an existing business is also possible. Typically, a new retail business is set up by acquiring a new lease in a desirable location. Generally a new retail business is set up by establishing a new company and acquiring a lease. Franchising is also sometimes used. However, it has become more common for luxury brands operate directly.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No. It is only permissible to pay rent in advance for a period not exceeding 3 months. No. Usually, the Landlord would negotiate a higher rent. No. It is common to agree new rental terms. Discounts (rent-free periods) are sometimes offered to reflect the fit-out period during the first year of the lease.
Does a special legal regime apply to retail leasing or operation? The general law regarding urban leases is laid down in the Civil Code. Legal relationships in retail lettings in malls or retail parks are governed by atypical contracts. All types of lease agreement are governed by the Romanian Civil Code which generally provides for rules and regulations that can be contractually excluded by the parties. No.
How long is a typical new retail lease? Normally between 5 and 10 years. If the parties do not agree on a fixed term, the lease is treated as for a period of 5 years. Generally, for anchor tenants, lease agreements are concluded for more than 10 years. In case of smaller tenants, the usual term is between 3 and 5 years. Depending on the space, 5, 10 or 15 years.
How common is a turnover-based rent? A turnover-based rent is not common in commercial leases. This type of rent is only common in malls. In malls, it is common for the rent to be set as a percentage of the turnover subject to a minimum monthly guaranteed rent. The practice of turnover-based rent existed in large shopping centres before the financial crisis of 2008. Now the majority of landlords prefer to operate on a fixed rent basis.
Does the level of rent tend to be fixed or will it increase? Rents normally increase every year. Any rent review must be in line with the legal annual rate approved by the government. However, the parties may define other ways to vary the rent in the contract. In most cases the rent is indexed yearly, in line with the Harmonized Index of Consumer Prices. Sometimes parties will agree on a fixed increase in the rent, depending on the term of the lease. Generally rent is increased yearly by 3 to 7 percent, depending on the location. Sometimes the CPI or another similar index is used for rent indexation.
Is it normal for a new tenant to provide some form of security or guarantee to the landlord?

Yes, common security includes:

  • a guarantee (personal responsibility assumed by a third party
  • a deposit equal to around 3 to 6 months' rent
  • a bank guarantee equal to around 6 months' rent.
Lease agreements usually provide for a guarantee up to the equivalent of 3 to 6 months' rent in the form of a bank letter of guarantee or a cash deposit. Normally landlords require the payment of a "security deposit" equal to between 3 and 6 months fixed rent. Bank guarantees are less common. Some landlords also require parent guarantees from newly incorporated tenants.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes, planning/zoning restrictions may limit where a retail operation can be set up. The relevant urban plan will prescribe the uses permitted in a given area. When the premises are built, the real estate must comply with the provisions of general planning and zoning regulations, which may impose restrictions on construction for retail operations. Yes, to the extent that the building's permitted use must be suitable for retail purposes. Planning/ zoning restrictions are generally applicable to new construction.
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? This may be against competition law. Such exclusivity clauses may give rise to competition issues and a self assessment should be carried out to determine the actual effects of such a clause on the relevant market. Such provisions are not binding on landlords and may entail liability on both landlords and tenants for violating anti-trust law. However, we see such provisions in lease agreements involving "big box" retailers.


Spain Sweden Thailand
Is a trading licence required for a retail operation? No. No. No, unless the lease is entered into by a person or foreign entity not meeting the minimum capital requirements under the Foreign Business Act.
How is a new retail business normally set up? Typically by acquiring a new lease or taking over an existing lease in a desirable location. Typically by acquiring a new lease or taking over an existing lease in a desirable location. Franchising of whole retail units is relatively rare as is acquiring an existing business. By acquisition of a new lease or taking over an existing lease. A business may often purchase land freehold when setting up, but foreign owned businesses may be restricted from owning land.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No. In prime locations this may happen, but it is not considered common practice. Yes.
Does a special legal regime apply to retail leasing or operation? Lease agreements applicable to commercial premises are regulated by the obligations agreed on by the parties and also by the Spanish Urban Leases Act (Act 29/1994 of 24 November) and the Civil Code. No. No.
How long is a typical new retail lease? The typical term in retail is between 3 and 15 years. subject to break options after a fixed initial period. Between 3 and 5 years. 3 to 15 years. The parties typically opt for a 3 year term with subsequent options to renew – typically four options – in order to avoid registration and its associated costs.
How common is a turnover-based rent? In malls it is quite common to have a structure of turnover rent with a minimum guaranteed rent, or fixed rent plus a turnover rent. Outside malls turnover rents are uncommon. In malls it is common for around 80% of the rent to be at a fixed level with the remaining 20% dependent on turnover. Outside malls turnover rents are uncommon. Not very common, though it does exist.
Does the level of rent tend to be fixed or will it increase? Yes, usually the rent is adjusted every year in line with the Spanish National Consumer Price Index. Market rent reviews are not uncommon in commercial lease agreements effective from the fifth year onwards. Rents normally increase every year through indexation. However formal rent renegotiation normally takes place at the end of the lease period, ie every 3 to 5 years. Rents typically increase every three years. The average increase ranges from 8% to 15%, and increases are often pegged to market fluctuations.
Is it normal for a new tenant to provide some form of security or guarantee to the landlord? There is a legally mandatory deposit equal to two months' rent. Additional contractual guarantees are also common, generally in the form of a first demand bank guarantee. In some cases, a parent company guarantee may be acceptable instead. Newly set-up retail businesses are commonly expected to provide some form of security, such as a parent company guarantee, bank guarantee or deposit. Yes. A security deposit of three months is common for a three year lease term.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes, the applicable planning parameters govern the implementation of retail use. In addition, each region in Spain has its own relevant regulations. Yes. Real estate must be authorized for general retail use. The specific form of retail use is not normally restricted by law. Yes. Zoning restrictions will limit the areas where a retail operation may be set up.
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? Yes, exclusivity clauses in lease agreements for shopping centres are very common. Yes. Yes, this is permissible so long as Thailand's competition laws, specifically the Trade Competition Act, are not violated. As a general rule, exclusivity arrangements are fairly common in lease agreements, but will often depend on the parties' negotiating strength.


Turkey UAE – Abu Dhabi UAE – Dubai
Is a trading licence required for a retail operation? Yes, an "operating permit" must be obtained for each retail unit from the relevant municipality. Yes, a commercial permit is required. All companies must register their trade names and become members of the Abu Dhabi Chamber of Commerce and Industry (ADCCI). All companies are required to have a trade permit which sets out their licensed activities.
How is a new retail business normally set up? Typically by acquiring a new lease or taking over an existing lease in a desirable location. Commercial permits for retail activities are usually only available to local limited liability companies. A local partner is required to form such an LLC and take a lease. Distribution/agency/franchise arrangements can be used. The company will usually acquire a new lease. Assignments are relatively uncommon in Dubai. The company must then apply for a trade permit at the Dubai Department of Economic Development.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? Yes. Especially for good locations it is very common to pay a premium either to the landlord or the previous lessee. No. No.
Does a special legal regime apply to retail leasing or operation? There is a special lease chapter in the Turkish Obligations Code, which regulates commercial leases and residential leases separately. There are no specific regulations apart from the general law applying to leases of commercial property. There are no specific regulations apart from the general law applying to leases of commercial property.
How long is a typical new retail lease? Between 5 and 10 years. We are seeing an increase generally in the length of retail lease terms. A tenant could expect a term of between 3 and 5 years in a reputable mall. We are seeing an increase generally in the length of retail lease terms. A tenant could expect a term of between 3 and 5 years in a reputable mall.
How common is a turnover-based rent? In malls, in most cases, the rent corresponds to a percentage of the turnover with a minimum guaranteed rent. Outside malls turnover rents are uncommon. In malls it is common for 90% of the rent to be at a fixed level with the remaining 10% dependant on turnover. We have also seen turnover rents apply where the turnover exceeds the base rent figures. Outside malls, turnover rents are uncommon. In malls it is common for 90% of the rent to be at a fixed level with the remaining 10% dependant on turnover. Outside malls, turnover rents are uncommon.
Does the level of rent tend to be fixed or will it increase? Rents normally increase every year either at a contractually agreed rate or in line with Consumer Prices Indices. Rents normally increase by a fixed amount every year. However, these are subject to an annual capped increase of 5%. Rents normally increase by a fixed amount every 3 to 5 years. However, these increases are subject to the rental index issued by the Real Estate Regulatory Agency.
Is it normal for a new tenant to provide some form of security or guarantee to the landlord? Yes, a cash deposit equal to 2 to 3 months rent is often demanded. Bank letters of guarantee are often accepted by lessors, however parent company guarantees are unusual. Retail businesses are usually expected to provide a security deposit of between 3 and 6 months' rent. Parent company/bank guarantees are becoming more common. Retail businesses are usually expected to provide a security deposit of between 3 and 6 months' rent.
Do planning/ zoning restrictions limit where a retail operation can be set up? Yes. Real estate must be authorized for business use. The specific form of retail use is not normally restricted by law. Yes, by the municipality in relation to the original construction and by the Department of Economic Development via the licensing process. The Abu Dhabi Urban Planning Council will also consider large scale planning applications. Yes, the Dubai Municipality determines the zoning criteria for each area within Dubai. The specific form of retail use is not normally restricted by law.
Is it legal for a landlord and tenant to agree to exclude another retailer from a location? This may be against competition law but we see such clauses in lease contracts signed between large retail chains and mall owners. This may be against competition law in the UAE. However, this law only comes into full effect on 23 August 2013 so it is unclear what effect it will have. This may be against competition law in the UAE. However, this law only comes into full effect on 23 August 2013 so it is unclear what effect it will have.


UK (Including Scotland) Ukraine USA
Is a trading licence required for a retail operation? No. Yes, a trading patent as provided for by the Ukrainian Tax Code is required for general trading operations. Corporate filings are required in each state where business is carried on; local business permits are required in municipalities where stores are located.
How is a new retail business normally set up? Typically by acquiring a new lease or taking over an existing lease in a desirable location. Franchising of whole retail units is relatively rare as is acquiring an existing business. Typically by acquiring a lease or buying a retail real estate facility, including the development of a new facility. Franchising is also widely used. Typically by acquiring a new lease or taking over an existing lease in a desirable location. Franchising of whole retail units is relatively rare as is acquiring an existing business.
Is it common to pay a premium to a landlord for the right to take over an existing lease or business? No. Such payments are, in effect, illegal. In the rare cases where it would be possible one would expect the annual rent to be discounted. No, it is uncommon and, in fact, illegal. No.
Does a special legal regime apply to retail leasing or operation? No. There are no specific regulations apart from the general law applying to leases of commercial property. No.
How long is a typical new retail lease? Between 5 and 15 years. A typical lease may be short term (1 year to 2 years and 11 months), not requiring notarization or registration or long term – from 3 years upwards (but normally 10 to 20 years). Long term leases require notarization and registration and thus are not commonly used. Between 5 and 15 years.
How common is a turnover-based rent? In malls it is common for around 80% of the rent to be at a f