The city ranked above Bilbao, Porto, Dusseldorf and Gothenburg for its approaches and ability to securing foreign investment.
FDi Intelligence, which is part of the FT group, cited Glasgow's partnerships between Government, academia, businesses and the community and the hundreds of millions of pounds in funding secured over the past 18 months to advance the innovative sectors emerging across the city region.
As well as the number one spot for its foreign direct investment strategies in the European Cities & Regions of the Future 2024, Glasgow was also ranked fifth for connectivity and 10th for business friendliness.
The rankings are based on the performance of 330 European cities. The 'Large Cities' category includes those cities with a population of over 500,000 and a wider urban region of over one million.
The city has improved its performance in all three categories in comparison to 2023, when Glasgow was ranked 3rd for strategy, 6th for connectivity and outside the top 10 for business-friendliness.
The news has been welcomed by City Council, business and university leaders, who said the accolade was testament to the hard work by all partners in attracting investment, which was already improving the global reputation of the city.
Councillor Susan Aitken, Leader of Glasgow City Council, said: "I'm absolutely delighted to see this recognition of the impact of the City Government's economic policies, which have transformed Glasgow's approach to inward investment and put us in the top rank of European cities to attract high quality jobs and generate growth all our citizens can share in.
"Recent years have seen the emergence of really significant sectors in tech, the green economy, the space industry, the creative economy, and advanced manufacturing - and these will all help to drive Glasgow's future growth and high skilled jobs.
"Taken with our recent ranking as the world's 61st best city for global investment attractiveness, Glasgow can take real encouragement from how the world increasingly sees us."
fDi Intelligence provides industry leading insight and analysis on global investment activity with rankings based on the economic, financial and business strengths of European cities and regions.
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The City Council's Invest Glasgow team has helped attract overseas investment which has brought over 6000 jobs in the past five year. The team have helped to bring such investment from major companies such as Barclays, JPMorgan Chase, Morgan Stanley, Merck KGaA, Planet DDS and Spire Global to the city.
A new investment strategy for Glasgow was launched in the Autumn of 2023, responding to the changes in the investment landscape, impacted by Brexit and the pandemic.
In its publication, which will be circulated across investment and real estate markets over the coming year, fDi Intelligence said Glasgow has leapt to number one due to the city's "approach to innovation" which it said "has been forged in partnerships between academia, industry, government and local communities". It cites the emergence of hi-tech and innovate firms across the city region, including 200 life science companies and the importance of the three innovation districts and five innovation centres in. It also references the new facility and expansion by German pharmaceutical group Merck as an example of the city's ability to advance hi-tech sectors.
Stuart Patrick, chief executive, Glasgow Chamber of Commerce said: "Glasgow has a strong track record of attracting investment across a diverse discipline of sectors. Our global expertise in such industries as financial services, life sciences and a growing reputation in renewables has elevated our position to being one of the top cities for investors and business looking to base their operations here.
"Couple this, with the universities and colleges in our city which are supplying the city region's skills base for present and future demands, it is no surprise to see Glasgow recognised as a top destination for international investment."
Uzma Khan, Vice-Principal for Economic Development and Innovation, and Deputy Chief Operating Officer at the University of Glasgow, said: "The University of Glasgow is committed to creating decent, well-paid jobs and attracting investment into our city region through our world-leading research excellence and innovation ambitions. Through our focus on developing the Glasgow Riverside Innovation District, we are investing alongside partners to support the city's strategy, such as the development of the world-class Health Innovation Hub in Govan, which will set the stage for a thriving life sciences cluster in Glasgow, attract new innovative businesses to the region and deliver local benefits to our communities.
"In a fiercely competitive world, we are thrilled that Glasgow's approach has been recognised as leading the way on attracting overseas investment, as well as it being ranking in the top 10 for European cities in terms of connectivity and business-friendliness. We look forward to playing our part in attracting further investment to Glasgow."
Professor Sir Jim McDonald, Principal & Vice-Chancellor of the University of Strathclyde and Co-Chair of Glasgow Economic Leadership, the strategic body for economic development in Glasgow and Glasgow City Region, said: "Glasgow City Region is the economic powerhouse of Scotland with strong sectors such as FinTech, Space Technology, Advanced Manufacturing, Life Sciences and Energy which are supported by the world-class research and graduates of the city's universities and colleges.
"Thanks to a cohesive investment strategy, a focus on innovation and entrepreneurship, and a 'triple-helix' approach to partnership working between academia, industry and government, Glasgow has developed an exciting strategic vision and is attracting the inward investment that is helping to create jobs and develop a skilled workforce, to boost the city's prosperity, and to build a sustainable net zero economy for the future."
David McClelland, Glasgow site head and Managing Director for Merck's Scottish sites, said: "The recognition of Glasgow as the best European city for fDi is thoroughly deserved and a just recognition for the strides the city has made in attracting investment over the last number of years. Just last year we announced a €35 million expansion to Merck's biosafety testing services site in Glasgow, which demonstrates the city's status as a global hub for science and innovation, built on an excellent pipeline of talented workers."
