Although Neutral in WW2, the Portuguese Navy was mobilized to defend the homeland and far flung colonial empire against all belligerents. This was certainly not an easy task, as shown by the desperate fight shown by the Dutch in the east indies. The Portuguese Navy was fortunately brand new in 1939, with a collection of modern destroyers, submarines, and large sloops and gunboats, some, like the Albuquerque class, able to fight destroyers.
The Portuguese Navy indeed had to face a possible mainland invasion, but more so the seizure of Cape Verde Islands, but more so, the strategically highly valuable Azores islands. Both the U-Boats were passing by it when transiting from the Bay of Biscay to the south Atlantic, and this could have made for Hitler a formidable advanced base in the Atlantic. Portuguese Neutrality aside, the Army, Navy and Air force of the Azores were considerably reinforced. Both the axis and allies planned numerous operations. In the end, in 1943 based on the of Anglo-Portuguese naval alliance, a British RAF base was leased in the Azores, while the Portuguese air force and navy were considerably reinforced, both by local constructions and British transfers. That way towards the end of the war, the “neutrality” of Portugal was definitely leaning towards the allies.
On the other side of the globe, Timor, Goa and Macau soon fell into the orbit of the Japanese Empire. Goa and Timor were invaded (Timor was preventively defended by Dutch and Australian forces in 1941), while the battle of Timor lasted until 1945, and Macau was transformed into a de facto Japanese protectorate. The island was also bombed by US Navy planes which triggered a diplomatic crisis, believing the island was occupied by the Japanese.
The current page also list and detail all Portuguese Navy ships, from destroyers to modest fishing protection vessels.