This was partly due to the dominating position of the single Chamber of Amsterdam, which held half the shares and appointed eight members of the council.

The erection of such a company, with its monopoly of trade and its great privileges including the right of maintaining fleets and armed forces, of concluding treaties and of erecting forts, was nothing less than the creation of an _imperium in imperio_; and it may be said to have furnished the model on which all the great chartered companies of later times have been formed.

The English East India Company was, by the side of its Dutch contemporary, almost insignificant; with its invested capital of L30,000 it was in no position to struggle successfully against a competitor which started with subscribed funds amounting to L540,000.
The conquest of Portugal by Spain had spelt ruin to that unhappy country and to its widespread colonial empire and extensive commerce.

Before 1581 Lisbon had been a great centre of the Dutch carrying-trade; and many Netherlanders had taken service in Portuguese vessels and were familiar with the routes both to the East Indies and to Brazil.

It was the closing of the port of Lisbon to Dutch vessels that led the enterprising merchants of Amsterdam and Middelburg to look further afield.