This chapter explores the entry of European powers—Portuguese, Dutch, and British—and their transformation of existing economic structures. It focuses on the Dutch East India Company (VOC) and its monopolistic control over trade, land, and labour, particularly in Java and the Moluccas. The imposition of forced cultivation, tribute extraction, and militarized trade marked a sharp shift from earlier tributary systems. Indigenous political structures were subordinated to the needs of European capital accumulation. The chapter argues that colonialism ushered in a form of economic extraction that integrated Indonesia into global capitalist networks on unequal terms, sowing the institutional distortions that would persist for centuries.