Bahrain remains the Middle East and North Africa (Mena) region's most economically free country, according to the annual Index of Economic Freedom published by The Heritage Foundation and the Wall Street Journal.
Overall, the kingdom is ranked 13th out of 178 economies worldwide, between the US and the UK which rank 12th and 14th respectively and is the only Mena country to rank in the top 20.
In the 20-year history of the index, Bahrain has consistently achieved a score greater than 70, well above the world average.
The kingdom's 2014 economic freedom score is 75.1.
The report highlights that the kingdom's "transition to greater openness and diversification is based on foundations of economic freedom," and that Bahrain "continues to be a financial hub for dynamic economic activity, with high levels of trade and investment bolstered by a competitive and efficient regulatory environment".
According to the report, Bahrain has improved its economic freedom score in a number of categories at an above-average rate since index grading began 20 years ago, particularly in the areas of financial freedom, investment freedom and labour freedom.
"We are delighted that Bahrain's efforts to improve economic freedom and the kingdom's strong economic fundamentals have again been recognised," Transportation Minister and Economic Development Board acting chief executive Kamal Ahmed said.
"Bahrain's leading position and consistent high ranking over the last 20 years is a reflection of efforts to ensure we provide investors with the free and open business environment they need so we can continue to deliver sustainable growth for Bahrainis," he added.
The 2014 Index of Economic Freedom (www.heritage.org/index/ ) measures the level of economic freedom across 10 pillars: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption and labour freedom.
The report  has positive comments on Bahrain's open market environment, stating that the kingdom has a low average tariff rate and relatively few non-tariff barriers, favourable tax regime with most businesses exempt from taxation and no personal tax, and on the ease of starting a business which costs less than one per cent of the level of average annual income. Bahrain's ranking reflects its competitive advantage as a location for investment into the Gulf market, an economy now worth $1.5 trillion. Strategically located at the heart of the Gulf, Bahrain has long been considered the gateway to the region, with easy access to the larger economies of Saudi Arabia, Kuwait and Qatar. In September last year, the Fraser Institute's annual 'Economic Freedom of the World Index' ranked Bahrain as the eighth freest economy in the world.