The textile industry hopes to benefit from WTO membership
WTO member states have voted in favour of Vietnam's entry, which would make it the 150th member of the trade body.
The move, which has to be ratified by Vietnam's parliament, will give it more access to overseas markets but force it to cut high import tariffs.
Vietnam is Asia's strongest performing economy after China. Its economy is expected to grow by 7.8% in 2006.
Mixed reaction
Vietnam, which has set out its intention to leave the ranks of the world's poorest countries by 2010, will become a WTO member 30 days after its National Assembly approves the move.
Foreign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger
Le Dang Doanh, ministry of planning and investment
Challenges facing Vietnam
As a consequence of membership, it will have to reduce import duties from the current average rate of 17.6% to 13.8% within five to seven years of joining the WTO.
The lowering of import tariffs is expected to cut the state budget by some 21%.
After Vietnam joins the WTO, its textile, rice and coffee exporters will no longer be subject to other countries' import quotas.
But banking, insurance and telecommunications industries have expressed some reservations over the prospect of increased international competition.
Restrictions on foreign ownership of firms inside the country will be also be lifted.
"Foreign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger," said Le Dang Doanh, an economist at the ministry of planning and investment.
Communist-run Vietnam has been trying to gain membership to the WTO for more than a decade.
World's poorest
Until now, Vietnam, with a population of 84 million, has been the second most populated country behind Russia outside the WTO.
The WTO's main negotiating group approved the terms of Vietnam's membership at a meeting in Geneva in October.
The news comes as chipmaker Intel has gained the right to boost its initial investment in Vietnam from $300m to $1bn, according to Vietnamese officials.
The WTO's invitation to Vietnam comes in the run-up to the Asia-Pacific Economic Co-operation summit, which will take place in Hanoi later this month.
World Trade Organization (WTO) has officially invited Vietnam to become a member of their organization. Vietnam is the 150th nation to join the WTO.

Now that the country has joined the WTO, Vietnam will have more access to overseas markets, but will be forced to cut high import tariffs, thus reducing the budget by as much as 21%.

Vietnam has proclaimed its intention to leave the ranks of the world's poorest countries by 2010, and will become a WTO member 30 days after official approval from its National Assembly.

Joining the WTO will force a reduction in import duties, within five to seven years, from their current average rate of 17.6% to 13.8%.  It will also eliminate any import quotas WTO countries have against Vietnamese textiles, rice and coffee.  Vietnam's banks, insurers and telecommunications companies, however, will have to face competition from foreign interests, and restrictions on foreign ownership of Vietnamese firms will be eliminated.

"Foreign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger," said Le Dang Doanh, an economist at the ministry of planning and investment.