HANOI, Feb. 12 (Xinhua) -- Vietnam is likely to permit foreign fund management firms to open branches or establish 100-percent foreign-owned fund management companies in the country in the coming time, local newspaper Vietnam News reported Tuesday.

    Vietnam's Finance Ministry plans to petition the government to do so, in a move to heighten the government's ability to monitor foreign indirect investment flows into the country. World Trade Organization (WTO) commitments only requires such an opening-up within five years of Vietnam's WTO membership.

    Foreign fund managers currently invest in the domestic stock market through local representative offices, although Vietnam's laws regulate that representative offices are not allowed to conduct business.

    According to the ministry's statistics, there are 35 representative offices of foreign fund management companies now licensed in Vietnam. These offices get around the legal restrictions on business operations by mandating an individual agency, usually heads of the offices or staff, to make stock investments.

    Opening the market earlier than required by international commitments will lift the disguise of business activities of representative offices, and create a more stable and lawful channel for indirect foreign investment, said a ministry official.

    To improve the competitiveness of domestic fund management companies, the ministry will suggest the government limit business scale and the ability of institutions to establish a branch or wholly foreign-owned subsidiaries.

    To receive a license under the ministry proposal, a foreign fund management company would be required to manage securities of at least 300 million U.S. dollars and be free of violations of securities regulations in any foreign country for at least three consecutive years prior to being licensed.

    To form a branch in Vietnam, a foreign fund management firm would be required to have a minimum of three-year experience in managing public funds with a market value in excess of 500 million dollars.

    A number of foreign fund managers are already moving to expand operations in Vietnam, said the newspaper.