Dutch expansion to Asia started out as a series of long distance expeditions financed by several trading companies which were especially set up in various ports in the Dutch Republic, with the goal of trading for pepper and spices at their Asian source. However, their intense rivalry between these companies brought about a steep fall in the price of spices when these were sold in Holland. In 1601 the raadspensionaris (advocate) of the Dutch States General, Johan van Oldebarnevelt, launched the revolutionary idea of merging all existing companies into one United East India Company (Verenigde Oost-Indische Compagnie ), or the VOC. On March 20, 1602 this enterprise was inaugurated as a joint-stock company with a founding capital of 6.5 million Dutch guilders and granted the monopoly on the trade 'East of the Cape of Good Hope'.

The VOC was governed by 17 directors, the so-called Heren Zeventien ('the Seventeen Gentlemen'), who represented the directors of the participating chambers of Amsterdam, Hoorn, Enkhuizen, Rotterdam, Delft and Zeeland. The Company was authorised to make treaties with Asian princes in the name of the Dutch Republic, establish forts and garrisons, appoint governors and preserve law and order in the overseas territories. It was the young Jan Pieterszoon Coen above all who provided both the initial planning and execution of strategies that shaped the trading network of the VOC.

The VOC set new standards in the organisation and management of overseas trade between Europe and Asia and is thought by many to be the world's first-ever multi-national company - its personnel eventually included officers from a wide variety of countries and its trading network stretched across most of Asia, from Persia Gulf to the Pacific. However, the Company was not solely a trading venture - it was also designed to play a role in the Dutch struggle against the Spanish crown. The States General of the Dutch Republic provided the Company's ships with the guns and ammunition needed to attack the Spanish and Portuguese colonies in Asia. The VOC made a vital contribution by successfully bringing to an end the war of independence (1568-1648) against the Spanish crown.

The Company progressively strung together a vast chain of trade factories and territorial possessions. After the Napoleonic wars, what came to be known as the colonial empire of the Netherlands East Indies, arose out of the ashes of the Company's former possessions in the Indonesian Archipelago. It is so imprinted in Indonesian memory, that in colloquial speech, colonial times are often referred to as zaman kompeni - the age of the Company.

VOC strategy began with the building of strategic strongholds overlooking all strategic shipping routes. It then policed and taxed the traffic passing by, and sought - by treaty or naval force - the monopoly on the purchase and sale of specific local goods, such as tin, cloves, nutmeg and cinnamon. From the beginning, the Dutch made a relentless effort to control spice-producing Maluku, and then to force the Spaniards and Portuguese out of key positions elsewhere in Asia. A monopoly of nutmeg was more or less achieved with the conquest of Banda in 1621, and of cloves with the Ambon wars of the 1650s, though 'leaks' were not fully stopped up until the subjugation of Makasar in 1667.

When Melaka fell to the Dutch after a long siege in 1641, the VOC continued its vigorous offensive against Portuguese strongholds elsewhere in Asia. Ceylon and a string of harbours along the Malabar coast were conquered in the 20 years that followed. By 1690 the VOC was at the peak of its power in Asia, with a huge Asian trading network connecting 22 factories from Persia in the west to Japan in the east. Its payroll would mushroom to 24,879 European employees by 1753. Company servants were by no means all Dutchmen. It has been calculated that around 1770, no less than 80 per cent of all soldiers and 50 per cent of all sailors originated from outside the Dutch Republic which, at that time, had a population of less than two million people. Half of all personnel were stationed on the VOC's two prize possessions, Java and Ceylon.

However, Dutch hegemony at sea in Asia was successfully challenged by the English East India Company which, unlike the monopolistic VOC, left room in its Asian operations for private entrepreneurs. Corruption and lax management also led to the ruin of the VOC at the end of the 18th century. Virtually bankrupt, the VOC was nationalised in 1795. When its charter was revoked in 1799 its debt amounted to 219 million guilders - mostly due to losses suffered during the fourth Anglo-Dutch War (1780-1784). Almost all home-bound shipping was seized by the English navy and the VOC were no longer able to repay the costs of fitting out the outward bound fleets.

A venerable institution which had annually contributed some ten per cent of the total Dutch national income, it was now overburdened by debts and came to an ignominious end.

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