At perhaps Funchal's cutest square, Praça de Colomb, you find Loja do Chá, which means The Teahouse. While we aren't hardcore tea connoisseurs we truly love the tea here.
The real reason we come here, though, is to soak up sun on the outdoor terrace while having a drink whether it's tea, wine, beer or a coke.
They also serve quite decent food where we have had the high tea, a couple of times.