Boston has been named the best US city for foreign multinationals to do business, topping the fourth annual FT-Nikkei Investing in America ranking as companies prioritise skilled workers and research networks despite the city’s higher costs.
The rankings measure American cities across more than three dozen metrics important to foreign investors, and Boston represents a new kind of winner, driven by human and intellectual capital, rather than cheap land and low taxes. Its reliable power grid and strong public transit network helped the capital of Massachusetts fare better than previous winners in Florida and Texas in a new energy resiliency category.
Boston has tried to distinguish itself as a city that “stands strong for science and research” and remains open to talent from abroad, said mayor Michelle Wu.
The Boston area is home to more than 40 colleges and universities — including Harvard and the Massachusetts Institute of Technology. In total, these schools enrolled more than 160,000 students in 2025. More than half of residents are college graduates and one in five have a postgraduate degree.
“Intellectual curiosity is the language the city speaks,” said Shreya Dave, co-founder of Via Separations, a filtration technology start-up she jointly established while a graduate student at MIT. “You have access to engineering talent, HR talent. It’s not just developers, it’s not just material scientists. It’s the whole gamut.”
Foreign companies have followed that logic. Denmark’s Lego opened its new US headquarters in Boston this year, citing the city’s “strong and deep talent base” and its “leading academic and research institutions”. France’s Schneider Electric, which has its North American headquarters in Boston, is expanding into a new downtown location.
Seven Fortune 500 companies are headquartered in Boston and the city boasts one of the country’s most active start-up ecosystems. One in four dollars of biopharma venture capital funding in the US goes to Massachusetts companies, the second-largest share in the country behind California. The city received over $1.1bn in foreign direct investment last year, according to fDi Markets.
Mo Alkhadra, co-founder of lithium extraction company Lithios, came to MIT because it seemed “much better geared towards an entrepreneurial career journey” than a purely academic one. The city offered a network of mentors, colleagues and investors that no other city could offer, Alkhadra said. “It’s really the biggest driver for why we remain here.”
The region also has a softer advantage with overseas investors, particularly those from Europe, said Boston Chamber of Commerce CEO Jim Rooney. Executives visiting the city often respond to a combination of practical and cultural familiarity.
Boston was the closest major US city to Europe, had strong transatlantic links and offers a walkable urban core, Rooney said. Its Victorian architecture and narrow cobblestone streets feel less alien than many newer American business hubs.
Every resident lives within a 10-minute walk of a park and the city is one of the safest in the US. Boston’s Logan airport provides a non-stop service from more than 140 cities worldwide, making it one of the most globally connected hubs in North America.
“You’re not just building a business, you’re building a life here for all of your workforce,” said Wu.
Overseas partners still want to invest in the US and are increasingly looking to cities and states as partners amid uncertainty over federal policy on immigration, science and research, she added.
“In a time when there’s concern about what’s happening at the federal level and where America is in the context of global markets, Massachusetts is a place where . . . we have incredibly steady leadership,” said Massachusetts governor Maura Healey.
The US-Israel war in Iran, and the disruption of traffic in the Strait of Hormuz, has fuelled energy volatility, complicated the spending outlook for companies and left American cities grappling with higher energy costs. But fewer disruptions to Boston’s power grid than many of its close competitors and lower exposure to petrol prices — with just a third of its residents commuting to work by car — helped it score well on the new energy resiliency category.
The concentration of talent and competitive business landscape that makes Boston attractive to foreign investors has also made it increasingly difficult to live there.
“If the desire is for low cost, we’re not going to win. We know that,” Rooney said. “If the desire is to attract talented people and enjoy a good quality of life, then this is a place that people find attractive.”
Luc Schuster, executive director of Boston Indicators, a civic research centre, said the city has failed for decades to build enough housing. Construction permits for new housing were down 33 per cent in the past decade. Over the same period, the number of municipalities within Greater Boston where median house prices were below $500,000 has fallen from 57 to three, adjusting for inflation.
The result was not so much that young graduates immediately leave, he said, but that they stay by crowding into older apartments and paying more than they would like.
If housing costs push out young families while tighter visa rules slow the arrival of students and skilled workers, the region risks weakening the very labour market that draws companies in, Schuster added.
Local leaders argue the region is beginning to respond. Massachusetts has passed a statewide upzoning law to allow for denser housing and legalised accessory dwelling units, moves Schuster says have produced early increases in housing permits.
Healey has set a goal of building 220,000 homes statewide by 2035, though the early gains remain small relative to the scale of the shortage.
Boston’s immediate challenge, then, is not whether it can attract ambitious outsiders. From colonial merchants to Irish immigrants, European executives and MIT-trained founders, the city has repeatedly drawn people looking to build something.
Its harder task is making sure they can stay.
