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What are the pros and cons and compliance considerations of choosing an industrial or commercial building as premises for a pharmaceutical business?

A complete explanation of the regulatory basis, Drew Tang’s recommendations and risk alerts. The original material dates from 2025; read it alongside the latest official requirements.

Original guide, 2025 edition: These FAQs are provided for topic-based reference and have not all been individually checked against current rules. Please confirm fees, personnel, renewal, changes and product requirements against the professional in-depth guide for the relevant licence type and the official requirements in force at the time.

Drug Office, Department of Health Chinese Medicines Board

Q158 · Category D: Premises and Storage Requirements (Q151-Q200)
Choosing an industrial building or commercial building as premises for a pharmaceutical business involves balancing cost, compliance and operational convenience. Industrial buildings generally offer lower rents, larger units, higher floor loading capacity and freight lifts, making them suitable for receiving and dispatching large volumes of medicines. However, some older industrial buildings may have poor hygiene and security, requiring additional investment in refurbishment. Commercial buildings are generally in convenient locations, with better building management and security and a better overall environment. However, rents are high, units are smaller, and there may be various restrictions on transporting goods, such as time-limited use of passenger lifts. From a compliance perspective, whichever type of building is chosen, you must ensure that the unit’s Occupation Permit and land lease allow it to be used as a ‘warehouse’ or for ‘non-domestic’ purposes.

📘 Regulatory basis

The Department of Health focuses mainly on whether premises meet the physical and management requirements for medicine storage, and has no preference for a particular building type. However, the use of the premises must comply with the requirements of the Buildings Department and the Lands Department. Operating from premises whose use does not comply with land-use requirements is illegal.

📗 Drew Tang's recommendations

For wholesalers requiring a larger storage area, we generally recommend newer industrial buildings, which have well-developed facilities, meet storage needs and provide a good office environment. Before signing a lease, have a solicitor or professional check the occupation permit and lease terms for the unit to confirm that its intended use is permitted. We can assist clients with due diligence to help them avoid leasing pitfalls.

📕 Risk notice

Leasing a unit that does not comply with statutory permitted use is a fatal mistake. Even if you invest heavily in fitting it out and pass a Department of Health inspection, if the Buildings Department or Lands Department discovers a breach, you may be ordered to vacate immediately, and your investment could be lost. This is the primary legal risk to avoid at the site-selection stage.

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