Qatar has moved closer to granting permanent residency to foreigners after its senior legislative body approved a draft law, first announced in the wake of the ongoing Gulf crisis.

State media reported the Shura Council agreed on Monday to back a law which would grant residency to expatriates who provide valuable services as well as to the children of Qatari women married to non-Qataris.

"The Advisory (Shura) Council approved a draft law on permanent residency," the Qatar News Agency reported.

Permanent residents would be allowed to have free state education, healthcare and be given the right to own property.

It is thought to be the first such law proposed by one of the energy-rich Gulf states.

It was first announced last August just two months after Qatar was boycotted by neighbouring former allies in a bitter diplomatic dispute.

Like other nations in the region, Qatar relies massively on foreign labour.

Its current population of 2.71 million, a record, is made up of almost 90 per cent non-nationals, many helping the country prepare to host the 2022 World Cup.

There are some 315,000 Qatari nationals.

The residency proposal will now be considered by Qatar's cabinet and Emir Sheikh Tamim bin Hamad Al-Thani before it becomes law.