In 1865 the Sultan of Brunei leased the territory of Northern Borneo to American Charles Lee Moses. Following a series of financing problems the lease changed hands multiple times before it came under the control of merchant Alfred Dent. In 1881 Dent founded the British North Borneo Provisional Association with the support of fellow Englishmen Sir Rutherford Alcock and Admiral Sir Henry Keppel. The association quickly gained an official Royal Charter and transformed into the North Borneo Charted Company. With the power that this new charter provided they began properly administrating Northern Borneo, organising further settlement, and acquiring additional sovereign and territorial rights from the Sultan of Brunei.
Among the privileges granted to Dent and his supporters was the right to produce a local currency. They wasted no time, beginning in 1882 North Borneo one cent coins were produced at the private mint of Heaton and Sons in Birmingham with half cent pieces being added from 1885. These coins were made of copper and were likened to the silver dollar that was used in the Straits Settlement and Hong Kong. In 1888 North Borneo became an official protectorate of Great Britain but its management remained within the hands of the North Borneo Chartered Company. In 1903 the coinage was quite seriously altered with the addition of two and a half cent and five cent pieces along with the design of the one cent piece.