Batavia built in what is now Jakarta, 1682
With Dutch naval power rising rapidly as a major force from the late 16th century, the Netherlands dominated global commerce during the second half of the 17th century during a cultural flowering known as the Dutch Golden Age. The Netherlands lost many of its colonial possessions, as well as its global power status, to the British when the metropole fell to French armies during the Revolutionary Wars. The restored portions of the Dutch Empire, notably the Dutch East Indies and Suriname, remained under Dutch control until the decline of European imperialism following World War II. Since the 1950s, the Netherlands has been organized as constituent countries composing the Kingdom of the Netherlands. As of October 10, 2010, the countries within the kingdom are the Netherlands proper, Aruba, Curaçao, and Sint Maarten.
The territories that would later form the Dutch Republic were originally part of a loose federation known as the Seventeen Provinces, which Charles V, Holy Roman Emperor and (as "Carlos I") King of Spain, had inherited and brought under his direct rule in 1543. In 1566, a Protestant revolt broke out against rule by Roman Catholic Spain, sparking the Eighty Years' War. Led by William of Orange, independence was declared in the 1581 Act of Abjuration. The revolt resulted in the establishment of an independent Protestant republic in the north, although Spain did not officially recognize Dutch independence until 1648.
The coastal provinces of Holland and Zeeland had for centuries prior to Spanish rule been important hubs of the European maritime trade network. Their geographical location provided convenient access to the markets of France, Scotland, Germany, England and the Baltic. The war with Spain led many financiers and traders to emigrate from Antwerp, a major city in Flanders and then one of Europe's most important commercial centres, to Dutch cities, particularly Amsterdam, which became Europe's foremost centre for shipping, banking, and insurance. Efficient access to capital enabled the Dutch in the 1580s to extend their trade routes beyond northern Europe to new markets in the Mediterranean and the Levant. In the 1590s, Dutch ships began to trade with Brazil and the Dutch Gold Coast of Africa, and towards the Indian Ocean and the source of the lucrative spice trade.
An anachronous map of the Dutch colonial Empire. Light green: territories administered by or originating from territories administered by the Dutch East India Company; dark green the Dutch West India Company.
This brought the Dutch into direct competition with Portugal, which had dominated these trade routes for several decades, and had established colonial outposts on the coasts of Brazil, Africa and the Indian Ocean to facilitate them. The rivalry with Portugal, however, was not entirely economic: from 1580, after the death of the King of Portugal, Sebastian I, and much of the Portuguese nobility in the Battle of Alcácer Quibir, the Portuguese crown had been joined to that of Spain in an "Iberian Union" under the heir of Emperor Charles V, Philip II of Spain. By attacking Portuguese overseas possessions, the Dutch forced Spain to divert financial and military resources away from its attempt to quell Dutch independence. Thus began the several decade-long Dutch-Portuguese War.
In 1594, the Compagnie van Verre ("Company of Far Lands") was founded in Amsterdam, with the aim of sending two fleets to the spice islands of Maluku. The first fleet sailed in 1596 and returned in 1597 with a cargo of pepper, which more than covered the costs of the voyage. The second voyage (1598–1599), returned its investors a 400% profit. The success of these voyages led to the founding of a number of companies competing for the trade. The competition was counterproductive to the companies' interests as it threatened to drive up the price of spices at their source in Indonesia whilst driving them down in Europe.
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