A method for encapsulating a core material within a capsule having a permeable or semipermeable membrane is disclosed using a complex formation reaction between oppositely charged polymers, wherein one of the polymers is an oligosaccharide such as chitosan and the reaction is carried out at a pH between about 6.6. and 7.5. The method overcomes the poor solubility of such high molecular weight polysaccharides at neutral and alkaline pH, providing capsules having useful strength and permeability.