A rather apt setting considering the name of the film. Largo do Cais is the small square that fronts the old Coloane pier. This is the area where Largo comes out from having his tattoo to confront the thugs.
Other than the tattoo hut, the buildings in the vicinity are all still there so I can only assume they were real and not created solely for the film. Look carefully on the right of the bottom picture and you can just make out the edge of the old pier. Perhaps the most striking thing is that since the film was shot, builders have managed to build a whole new building in the space on the left of the bottom picture - you can see it on the left of the top picture below.
On this lower picture you can see the tiled picture (of a boat) on the floor that was also captured in the film (screen grab #3). In the film the tattoo hut was in the gap between there and the blue building on the left.