Advertisement
Features

20 March 1602: Dutch East India Company formed

The Dutch East India Company – considered by many to be the world’s first multinational company – was founded on his day in 1602.

15-3-19-VOC-634
Arms of the world's first multinational: the Dutch East India Company

During the 16th century, trading expeditions were highly risky, with loss of life and cargo due to shipwreck and piracy extremely common. To encourage investors to put money into these ventures, governments would grant individual companies temporary monopolies over certain areas and routes.

The Dutch East India Company (Vereenigde Oostindische Compagnie, or VOC), which was established in 1602, was not thefirst of these. However, because of its size, it is often considered to be the world's first multinational company.

Advertisement - Article continues below

The VOC's charter granted it exclusive rights over any trade in Asia. To enforce this, it was allowed to raise a private army, build forts and even run its own judicial system and currency. However, Holland was not the only country exploring Asia.

For example, England had formed the rival East India Company two years earlier. Many years of conflict between rival trading companies followed, but in 1620 the VOC's rivals agreed to stay away from Indonesia, leaving theVOC with a monopoly there. It also established bases in South Africa, India and Sri Lanka, as well as gaining exclusive rights to trade with Japan.

By the middle of the 17th century the VOC was the largest company in the world and immensely profitable. But its fortunes started to decline in the face of rising competition. In spite of this, the company stubbornly continued to pay dividends, forcing it to take on more debt.

By 1796 its financial situation was so bad that it was nationalised by the Dutch government in a failed effort to save it. Just three years later, in 1799, it was wound up.

Advertisement
Advertisement

Recommended

How long can the good times roll?
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
5 August 1976: Big Ben breaks down for the first time in 117 years
Economy

5 August 1976: Big Ben breaks down for the first time in 117 years

The Great Westminster Clock, AKA Big Ben, ran smoothly for over 100 years until, on this day in 1976, metal fatigue took its toll and the clock broke …
5 Aug 2020
Listed companies are dying out, and that could have serious consequences
Stockmarkets

Listed companies are dying out, and that could have serious consequences

Private equity is taking over from public stockmarkets as the biggest provider of capital to companies. That’s bad for investors and bad for society a…
3 Aug 2020
Reasons for investors to be cheerful
Investment strategy

Reasons for investors to be cheerful

Markets are betting on a V-shaped recovery – and recent data suggests that they may be right.
3 Aug 2020

Most Popular

BP has slashed its dividend – and markets love it
Income investing

BP has slashed its dividend – and markets love it

BP has bowed to the inevitable and cut its dividend in half – and its share price promptly rose. John Stepek explains what it means for shareholders …
4 Aug 2020
Listed companies are dying out, and that could have serious consequences
Stockmarkets

Listed companies are dying out, and that could have serious consequences

Private equity is taking over from public stockmarkets as the biggest provider of capital to companies. That’s bad for investors and bad for society a…
3 Aug 2020
Can the recent rally in sterling continue?
Sponsored

Can the recent rally in sterling continue?

A "double top"  – a very recognisable pattern – is forming in in the US dollar. Dominic Frisby explains what it is, and what it could tell us about st…
3 Aug 2020