Spanish expeditions led by Columbus and Alonso de Ojeda reached the coast of present-day Venezuela in 1498 and 1499. The first colonial exploitation was of the pearl oysters of the "Pearl Islands". Spain established its first permanent South American settlement in the present-day city of Cumaná in 1502, and in 1577 Caracas became the capital of the Province of Venezuela. There was also for a few years a German colony at Klein-Venedig.
The 16th- and 17th-century colonial economy was centered on gold mining and livestock farming. The relatively small number of colonists employed indigenous farmers on their haciendas, and enslaved other indigenous people and, later, Africans to work in the mines. The Venezuelan territories were governed at different times from the distant capitals of the Viceroyalties of New Spain and Peru.