The decision allowing foreigners to acquire 100 per cent ownership of businesses in Bahrain will spur growth in the property market, analysts said on Thursday.

The government of Bahrain approved on Monday a new law giving foreign investors the opportunity to have full ownership of various business assets in the market. The landmark ruling was approved at a cabinet session led by Prime Minister Prince Al Khalifa, according to media reports.

The new ownership law will apply to different sectors, including residency, real estate, entertainment and leisure, food and administrative services, It follows a similar decree announced in June by the Saudi government, allowing non-locals to fully own retail and wholesale enterprises in the kingdom.

Real estate consultants headquartered in Dubai said the latest decision will likely encourage more investors to set up businesses in Bahrain and positively impact the local property market.

Faisal Durrani, head of research at Cluttons, noted that Bahrain’s property market already offers “competitive advantage to many other regional locations as its residential and commercial rents and values are among the most attractive” in the Gulf.

“The decision is likely to attract companies to set up a Middle East foothold in the Kingdom and for the first time puts Bahrain on a competitive footing with some of the region’s mega free zones and business hubs,” he said.

Harry Goodson-Wickes, head of Cluttons Bahrain and Saudi Arabia, said the move will also boost investor confidence and make Bahrain an attractive place to work and live in.

“The government’s decision to allow 100 per cent foreign ownership is an important development for Bahrain. Economic growth in the country had been subdued ever since oil prices fell from record highs two years ago and the announcement will likely have positive implications for business,” said Goodson-Wickes.