In 1801, he was promoted lieutenant and joined the Royal Military College at Great Marlow. He was promoted captain in 1804, and, being pronounced fit for a staff situation, was appointed deputy-assistant quartermaster-general with the force sent to South America in 1806. His conduct was praised in despatches, and in 1807 he was nominated in the same capacity to the corps proceeding to Portugal under Sir Arthur Wellesley. He was present at the battle of Roliça and battle of Vimeiro. He advanced into Spain with Sir John Moore, and served with the 2nd division through the retreat from Salamanca and at the Battle of Corunna. When William Carr Beresford was sent to Portugal in 1809 to organise the Portuguese army, Douglas was one of the officers selected to accompany him, and he was in February 1809 promoted major in the English army and appointed lieutenant-colonel of the 8th Portuguese regiment. He got his regiment fit for service, and was present at the passage of the Douro River in May 1809, and at the close of the year his regiment was attached to Thomas Picton's, the 3rd division, and brigaded with the 88th and 45th regiments. At the battle of Busaco this brigade had to bear the brunt of the French attack, and Douglas's Portuguese received praise for its conduct, mentioned in Lord Wellington's despatch.