TAIPEI, Taiwan (TheStreet) -- Vietnam is moving closer to letting foreign investors own public companies outright.
The Southeast Asian nation is drafting a decree to remove the current limit of 30% on foreign ownership of banks and 49% on all other companies. The decree is due around July 1, though skeptics question whether it will happen that soon. It also may take time for Vietnam to formulate specific rules for increasing foreign ownership, making the whole process a gradual one.
A further opening of listed companies would mark Vietnam's latest effort to attract outside investment, one in a series of such moves since it began overhauling its economy in the 1980s. Like China since 1978, relatively poor Vietnam depends on foreign capital to grow, though the Communist leadership in Hanoi hopes to retain control of its top state-run firms as a way of managing the economy.
Foreign investors -- including individuals as well as financial institutions -- currently hold stakes in Vietnam's major petrochemical, steel, retail and financial services companies. Government officials are studying whether to pair higher foreign ownership limits with rules that restrict voting in management decisions by majority foreign shareholders.
The government worries about losing control of its top firms, such as Vietnam Oil and Gas and dairy producer Vinamilk, but hopes more inflows of foreign capital will help those firms grow, investors say.
Foreign direct investment in the country, known as a rising-star manufacturing hub, has already helped boost the economy 6% last year. But the total market capitalization of $55 million made up just a wisp of the 2014 Vietnamese GDP.