A foreigner can legally invest in Indonesia either in his own name (Leasehold or Hak Pakai) or through a foreign-owned company called Penanaman Modal Asing (PMA).
At least two shareholders are required (the Chief Executive Officer and the Chief Commissioner) for the establishment of a PT PMA. At least one of the shareholders must be a foreign individual or a foreign legal entity (such as a corporation). The Director must be resident in Indonesia to carry out the activities. The foreigner who works and resides in Indonesia will easily obtain a tax identification number (NPWP) and a work permit (KITAS).
There is a list of permitted activities for this type of company called Indonesia Negative Investment List.
Such a company may be partially or wholly owned by foreigners. If a sector is partially closed to foreign investment, the list indicates the maximum percentage allowed. This means that you will need to have a local (Indonesian) partner to engage in that particular sector.
For the establishment of an PT PMA, the foreign investor must comply with the minimum capital requirements for foreign investment. Currently, the minimum requirement is IDR 10 billion or the equivalent value in US dollars (+/- USD 700 000) the paid-up capital (The amount that must actually be available) is generally set at 25% of the minimum capital requirement (i.e. IDR 2.5 billion or +/- USD 175 000).