In 1602 Dutch merchants established a trade association called Vereenigde Oost Indische Compagnie (VOC). In the Indonesian language, the association became known as the Dutch Company. Dutch Trade Board is basically aimed at making profit as much as possible and to strengthen its position in the face of his opponents such as Portuguese and Spanish. The formation of the government assisted the Dutch East India Company under Van Oldenbarneveldt. VOC privileged, so that became a sovereign entity. Privileges that include:
1. Monopoly rights to trade between South America to Africa
2. The right to maintain armed forces, war, establishing forts and conquer
3. The right to appoint the employees
4. The right to give the court
5. The right to print and circulate their own money
Instead VOC have obligations that must be met for the Dutch government, namely:
1. Responsible to the Staten General (Board Representative)
2. At the time of war to help the Dutch government with money and the army
In the beginning the relationship with the Company in Banten and although difficulties may be associated, but the prices of goods obtained very expensive. Therefore, in the year 1618 January Pieterzoon Coen with permission from Prince Jayakarta established a fort in the town of Jayakarta. When the dispute between Prince Jayakarta aided by the Sultan of Banten with Dutch people under the leadership of January Pieterzoon Coen, the Dutch people to burn the city Jayakarta.
However, in the year 1619, Jan Coen Pieterzoon new city founded in the city was burned by the name of the city of Batavia. Next Jan Pieterzoon Coen made the city of Batavia as a commercial center and the center of Dutch power in Indonesia. Of Batavia, the Dutch nation and expanding its attacks against the kingdoms of the region of Indonesia, which has not recognized Dutch control over its territory. Kingdoms like kingdom of Banten, Malacca, Makassar, Mataram, and so forth. In the face of the kingdoms in Indonesia, the Dutch launched a sheep race politics (Devide et impera). As a result, the Indonesian people hate the government and VOC control over Indonesian territory.