Boston tops FT-Nikkei ranking for foreign investment appeal

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Boston leads foreign investment ranking

Highlights

Boston ranks first in the FT-Nikkei Investing in America ranking, driven by talent concentration, infrastructure, and energy resiliency over cost factors.
Lego and Schneider Electric are expanding in Boston due to its academic institutions and highly skilled workforce, with the city receiving over $1.1 billion in foreign direct investment last year.
Housing shortage remains Boston's key risk as new housing permits fell 33 percent over the past decade and only three Greater Boston municipalities have median home prices below $500,000.

Talent base and infrastructure drive ranking

As reported by Financial Times, the fourth annual FT-Nikkei Investing in America ranking places Boston first among U.S. cities assessed on more than three dozen factors important to overseas investors. The latest ranking favors a model built on human and intellectual capital rather than lower land and tax costs, with Boston also benefiting from a reliable power grid, strong public transit and a solid showing in a new energy resiliency category.

Mayor Michelle Wu says Boston seeks to set itself apart as a city that stands strong for science and research and remains open to talent from abroad. The wider Boston area has more than 40 colleges and universities, including Harvard and the Massachusetts Institute of Technology, with combined enrollment above 160,000 students in 2025.

Business founders and multinational groups point to that talent concentration as a key draw. Lego opens its new U.S. headquarters in Boston this year, citing the city’s talent pool and academic institutions, while Schneider Electric is expanding into a new downtown location from its North American base in the city.

Boston also hosts seven Fortune 500 headquarters and one of the country’s most active start-up ecosystems. Massachusetts companies attract one in four U.S. biopharma venture capital dollars, second only to California, and the city receives more than $1.1 billion in foreign direct investment last year, according to fDi Markets.

High costs test Boston’s long-term advantage

The same concentration of jobs, capital and research activity that appeals to foreign investors also makes Boston harder to afford. Boston Chamber of Commerce CEO Jim Rooney says the city does not compete on low cost, but remains attractive for companies that want to recruit talented workers and offer them a high quality of life.

That quality-of-life case includes strong links to Europe, a walkable urban core, broad park access, relatively high safety levels and global connectivity through Logan airport. State and city officials also argue that overseas partners still want to invest in the U.S. and are increasingly working with cities and states as federal policy uncertainty affects immigration, science and research.

The ranking also comes as the U.S.-Israel war in Iran and disruption in the Strait of Hormuz fuel energy volatility and raise pressure on corporate spending plans. Boston scores well in energy resiliency because its grid faces fewer disruptions than many rivals and only about a third of residents commute by car, reducing exposure to petrol price swings.

Housing remains the main structural risk. Luc Schuster of Boston Indicators says the city has failed for decades to build enough homes, with new housing permits down 33 percent over the past decade and the number of Greater Boston municipalities with inflation-adjusted median home prices below $500,000 falling from 57 to three. Massachusetts has passed measures to allow denser housing and accessory dwelling units, and Governor Maura Healey sets a target of 220,000 new homes statewide by 2035, but early progress remains limited relative to the shortage.

Our earlier report on Washington’s affordability agenda looked at how lawmakers are linking pro-investment tax policy with efforts to ease housing costs. It highlighted Senate Banking Committee Chairman Tim Scott’s push against a wealth tax, support for lower capital gains taxes, and an emphasis on disciplined federal spending, alongside bipartisan work such as the 21st Century ROAD to Housing Act aimed at improving housing affordability for lower-income households.

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