Houston is the best city in the US for foreign multinationals to do business, according to the second annual FT-Nikkei Investing in America ranking. Texas dominated the rankings this year with five cities in the top 10, including Plano (3), Irving (4), Dallas (5), and Austin (7).

Houston, a city known for its oil and gas industry, has built on its hydrocarbon past to become a centre for green energy innovation. The city’s transformation into an international hub for a growing number of multinational corporations — backed by one of the nation’s busiest airports and global shipping ports — helped propel it to the top of the ranking.

“The last 12 months have seen a huge surge in foreign investment, thanks in part to the green incentives embedded in the Inflation Reduction Act,” said Peter Spiegel, US managing editor of the Financial Times. “Miami still attracts a huge amount of that investment, but Houston pulled ahead by providing the kind of services that overseas multinationals need to succeed in the US.”

The FT-Nikkei Investing in America ranking showcases the top US cities for international business. The ranking measures cities across more than four dozen metrics important to foreign investors, such as workforce and talent, openness, business environment, foreign business needs, quality of life and investment trends.

Houston also scored highly for its business-friendly policies, excellent logistics, affordable cost of living and a diverse community for overseas companies. The city boasts unrivaled technical expertise in energy, including manufacturing, engineering, trading markets and complex industrial project management. It also has a robust energy infrastructure and the nation’s biggest port by tonnage.

Other large Texas cities mirror Houston’s success. Austin and the Dallas metroplex rank among the top for workforce and talent, with a ready and growing labour pool supplemented with a dense network of universities nearby. The cities are leveraging their demographics and lower business costs to become national hubs for tech investors.

To view the FT-Nikkei Investing in America 2023 ranking in full, please visit: ig.ft.com/us-cities-index