Document requirements to drive in Portugal
EU standard or International drivers license required in Portugal. Also carry personal ID. Must have proof of insurance and roadworthy certificate for the vehicle.
Documents for Driver
Identity document: You must carry ID at all times in Portugal, not only when you are driving a vehicle. If you reside in Portugal - whatever your nationality - then you should carry proof of your fiscal number (número fiscal) and address. This should be on your Portuguese ID card or sheet of paper from the tax department certifying your fiscal number. If you are not resident in Portugal, then you must carry separate national ID from your home country - a passport or national ID card. It is essential that this is 'photo ID' i.e. the document has a photograph of yourself that is difficult to tamper with. You must carry the original document - not just a photocopy. The only time when it might be acceptable to produce a copy is if it has been duly certified as a 'true copy' by a Portuguese lawyer.
Driving License: Your original driving license - Portuguese or other. A photocopy is unlikely to be acceptable. This license should have the date of issue, your photo and residential address. An EU-standard driving license will have a specific credit-card size format and items of data. For example item 1) is your surname, item 8) is your address, item 9) lists the categories of vehicles the license is valid for etc. More information on Wikipedia. Your photo on your drivers license should obviously be similar to the photo on your identity document. You should get an International Drivers License (IDL) from your home country before arriving in Portugal if your current drivers license is not a photo ID. It is also a good idea to get an IDL anyway for some combination of 1) your current license does not meet EU standards, 2) you are a particularly old or young driver, 3) you are driving some vehicle other than a standard car.
Documents for Vehicle
Proof of Insurance: The vehicle must at least have third-party insurance valid in Portugal. This covers damage to other persons/property if you have an accident. You may also have a higher level of insurance such as comprehensive - covering yourself and your passengers as well. The insurance company will determine which drivers of your vehicle are covered by the insurance they offer. Proof of this insurance in Portuguese law is a 'certificate of insurance' which actually refers to the letter from the insurance company, not the disc or sticker attached on the inside of your windscreen. So it is better if you have the original insurance documentation in the inside of your car (e.g. in the glove box) AND the insurance disc on your windscreen. If you rent a car in Portugal, the car hire company will explain the insurance they provide and which drivers that insurance covers.
Vehicle identification document: This associates the registration number of the vehicle (the license plates) with other identifiers from the original vehicle manufacturer or agent. For example, the vehicle chassis number, the exact make and model of the vehicle, engine capacity etc. This documentation should have been provided with the original vehicle sale and stayed with all subsequent owners of the vehicle - typically in a documentation pack in the glove compartment of the vehicle. This documentation usually includes the logbook (proof of service history).
Proof of ownership: Portuguese law also says you should produce 'title record' to the vehicle. That is, you should be able to prove who is the legal owner of the vehicle - yourself or somebody else. Information as to the legal owner could be determined from other documents, but if you have some proof, carry it in the vehicle anyway. For example, a sales invoice if you bought the vehicle from a dealer, or an official record of transfer of ownership from a previous owner to yourself.
Vehicle inspection test report: The typical road-worthiness test report. In the same way as for insurance documents, this has two parts: The original test report, plus a detachable disc you place on the inside of your windscreen. You should have both. The disc alone is not the 'inspection report'.
The fine for incorrect documentation is €60-€300, typically payable on-the-spot. However if you subsequently produce the required documentation within 8 days at the location (for example a police station) notified by the police officer then the fine will be reduced to €60-€150.
You must have two discs on display in your windscreen. One for insurance, one for the road-worthiness inspection test. However you must have supporting documents (something that the police can identify as a 'certificate') for both in your vehicle as well.
You must be able to produce personal ID and proof of your driving license. If your driving license meets up-to-date EU standards, it should be sufficient. Otherwise get an International Drivers License if you can. All documents here should be proper 'photo IDs'. That is, have a photograph of yourself that is tamper-proof e.g. sealed inside a plastic-coated cover.
If the police inspect your documentation when you are out on the road, they should always return the documentation to you after inspecting it. They may impound your vehicle if they feel it is unsafe to drive and may very rarely keep a document only if they feel it is patently false e.g. to be kept as evidence against you in legal proceedings.
Always be prepared to provide 'original' documents - not photocopies. Keep those originals in your vehicle, not 'safely at home'. If you want copies for your own records, photocopy/scan the originals and keep the copies/scans at home.
If you use any kind of medical aid (spectacles for poor vision, prosthetic device for a physical disability...) then you must use that aid when driving.
If you are visiting Portugal, carry additional documentation that proves where you are staying in Portugal e.g. a receipt or invoice from a hotel. This is not a legal requirement, but helpful if you are involved in a serious accident and the police may want to visit you following the accident.
No driver may simultaneously hold more than one driving license issued by any of the Member States of the European Union or the European Economic Area. If for some reason you have two such licenses, only use one while driving in Portugal.