Luxembourg received the largest inward foreign direct investment of any of the 152 small cities reviewed Photo: Shutterstock

Luxembourg received the largest inward foreign direct investment of any of the 152 small cities reviewed Photo: Shutterstock

Luxembourg City has been ranked as one of Europe’s top cities of the future for its attractiveness to foreign direct investments.

The FDI Intelligence study published on Thursday benchmarks the most promising investment destinations across Europe, with 356 cities assessed in total, grouped by population sized and ranked based on data collected in five categories.

The grand duchy’s capital ranked sixth behind Basel, Cork, Reading, Geneva and Cambridge in the overall small cities ranking, with its best score in the economic potential category. However, it was missing from the top ten in the other four areas, including human capital and lifestyle, cost effectiveness, connectivity and business friendliness.

“It received the largest inward foreign direct investment (FDI) of any of the 152 small cities reviewed, and drew in 114 investments between October 2016 and September 2021,” the report said about Luxembourg. It also had the highest outward number of FDI projects among small cities.

“As a member of the EU, Luxembourg has access to one of the largest labour markets in the world,” the report said, adding that “the city has been developing an excellent internet infrastructure, allowing businesses located there to communicate seamlessly with the world.”

The , compiled by the Financial Times’ foreign direct investment intelligence division, compiles data on around 90 different indicators, from population, unemployment and GDP to the number of universities, ease of finding skilled employees, salaries, cost of starting a business, the number of airports and destinations served, and more.

Small cities are categorised as having between 100,000 and 350,000 inhabitants.

Luxembourg featured seventh in the report’s ranking of small European regions of the future, with fewer than 1.5 million people, where city areas around Dublin, Prague, Brussels, Zug, Vilnius and Oslo came ahead of the grand duchy’s capital. Luxembourg ranked second for economic potential in this category.

In the major European cities category, London ranked top ahead of Amsterdam, Paris, Dublin and Bucharest in the top five. Munich, Warsaw, Berlin, Madrid and Prague followed in the top ten.

The top five large cities of the future in Europe were Frankfurt am Main, Hamburg, Düsseldorf, Krakow and Rotterdam. In the mid-sized cities group, Zurich, Vilnius, Wroclaw, Edinburgh and Poznan came out on top.