The Portuguese Crown has between 1534 and 1536 created in Brazil a number of hereditary fiefs, called “captaincies,” some larger than Portugal itself.

According to the charter grant passed by King John III on March 10, 1534, the doneé of the Captaincy of Pernambuco was Duarte Coelho Pereira, who has served with distinction in the Portuguese campaigns in India.

The captaincy, sixty leagues wide, stretches between the Igaraçu River (a tributary of Canal de Santa Cruz southern portion) and the São Francisco River.

Pereira calls it New Lusitania.

The boundary to the north is the parallel marking the southern boundary of the Captaincy of Itamaracá; to the south, the Rio São Francisco far shore; to the west the Tordesillas meridian; to the east, the Canal de Santa Cruz and Atlantic ocean.

The captaincy initially includes what is today the state of Alagoras.

Upon receiving the donation, Duarte Coelho Pereira had gone to Brazil with his wife, children and many relatives.

They had landed on the shores of Santa Cruz canal, where there is a nucleus of settlement in the Porto dos Marcos.

He advances to the mouth of the Igaraçu River, Pernambuco, where he founds the village of the same name.

He builds the Church of Santos Cosme e Damião, the first in Brazil, giving the administration of the village to Afonso Gonçalves, and heads south.

On a hill, he builds a fort (Castelo Duarte Pereira), a chapel and houses for themselves and for the settlers, which become the settlement of Olinda, constituted a village by the Charter Act passed on March 12, 1537.

The sugar mills of Duarte Coelho and his wife, and that of his brother-in-law Jerónimo de Albuquerque on the Beberibe River near Olinda, are the first in the captaincy.

The small port of Olinda is negligible, with no depth to receive large vessels crossing the Atlantic Ocean.

In turn, Recife, a town named by the first donee for its arrecife dos navios (reef or causeway ships—Recife is shielded by a long barrier reef) becomes the main port of the captaincy.