Spain and Portugal were the first colonial empires . Sharp colonial and sea – trade rivalry developed between the two countries . To avoid an open conflict , they concluded an agreement in 1529 ; according to the agreement the world was divided in two halves , from pole to pole , the Spaniards having the right to seize colonies in one half and the Portuguese in the other . That was the first colonial division of the world . But the antagonisms between Spain and Portugal did not disappear and other invaders – Holland , England and France – began to appear in the world arena . In the 17th century , crowding out Spain and Portugal , Holland became one of the largest colonial powers . Dutch conqueror merchants had penetrated into India as far back as the end of the 16th century . A united East – India Company was organised in 1602 ( it existed until 1798 ) ; the company had a monopoly right to trade in the Indian and Pacific oceans . The Dutch merchants and their hirelings enslaved the people of Indonesia and predatorily exploited the riches of this tropical country . They annihilated the ” superfluous ” ( from the Dutch point of view ) population of the islands and burned a mass of valuable products in order to keep up high prices . In 1621 the Dutch set up the West – India Company which conducted operations on the American continent . colonial knowledge and In the middle of the 17th century the Dutch forced the Portuguese out of the southern part of Africa and founded their own colony – the ” Cape Colony ” . In 1656 the Dutch crowded the Portuguese out of Ceylon . But Holland was predominantly a trading country with a less developed industry , and in the sharp rivalry between Holland and industrial England the latter gained the upper hand . In particular , as the result of Anglo – Dutch wars , the English took the place of the Dutch in North America . The English colonial rise was hindered primarily by the powers – Portugal and Spain . With the approval of their government and without declaring war English warships attacked Spanish sea caravans sailing from America to Europe and looted them . The culmination of the Anglo – Spanish colonial and naval rivalry was the misfortune of the famous Invincible Armada ( 1588 ) destroyed by the English fleet . England rapidly became the ” ruler of the waves ” . However , it was not this high – sounding title that the young English bourgeoisie needed . The rule of the waves was a means of achieving domination on land . By the 17th century England had completed the conquest