Israel made another sharp rise, up six places from last year's ranking. The self-styled "startup nation" is in first place for technology and has one of the best finance environments, according to the report.
Australia dropped down two places but still ranks in the top five for business operating environment and labor market, supported by rapid growth in its two most dynamic cities - Sydney and Melbourne.
The emergence of Helsinki as a leading tech hub helps the Nordic nation share third place with Australia. It ranks in the top five for technology, finance and business operating environment.
Like neighboring Finland, Sweden's strengths are in its technology and operating environment, despite relatively high taxes. It has risen four places on last year's position of nine.
The fastest-rising entrant is up 27 places, driven by sharp improvements in market growth and technology. Investors anticipate these trends will continue.
Another rising European state, Switzerland is providing more evidence of the continent's recovery from the financial crisis. Business here benefits from a dynamic financial sector and a hospitable operating environment.
Oil-rich Norway is an increasingly attractive destination, rising two places thanks to its excellent infrastructure, a strong labor market and a healthy finance environment.
Canada is the highest ranked entrant from either American continent. It has the world's best business operating environment, according to the report, but still fell two places from last year.
The densely populated island of Taiwan scores highly for its technology and labor market, rising nine places to reach the top 10.