Vietnam will no longer require foreigners who want to invest in local private companies to take stakes of at least 30 per cent, an official said on Thursday.

Currently foreign investors in Vietnam must set up a formal joint venture in which their investment capital accounts for at least 30 per cent of total registered capital, or establish a 100 percent foreign-owned business.

A new regulation to go into effect May 25 specifies 35 areas in which the 30 per cent minimum investment requirement for foreigners will be dropped, an official with the ministry of planning & investment said on condition of anonymity.

They include agriculture, processing industries, paper, chemistry and health services.

He said the new rule will open more business opportunities to foreign investors, he said.

Vietnam first opened its doors to foreign investors in 1987. It now has 3,198 foreign-invested projects in operation with gross registered capital of $38.194 billion, according to ministry

figures.

In the first four months of 2002, the country licensed 189 new projects with a combined capital of $355 million. The figures represent a 20 per cent year-on-year increase in the number of new projects but a 28 per cent decrease in their value.