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4. Munich, Germany

Munich is Germany's third largest city and one of the country's key economic centers. It is also one of three German cities to dominate the top 10 rankings for the best quality of life.

Holding on its fourth spot from last year, Munich is home to some of Germany's most notable businesses, including engineering firm Siemens and insurer Allianz. The city generates nearly 30 percent of the gross domestic product of the State of Bavaria. Munich's per capita purchasing power was more than $33,700 in 2011, the highest among all German cities and 30 percent above the national average. Drawing immigrants to its industries from all over the world, more than a fifth of the city's residents are foreigners.

Munich ties fellow German city Frankfurt for having the second best infrastructure in the world, according to Mercer. In total, four German cities including Dusseldorf and Hamburg dominate the top 10 infrastructure rankings highlighting the country's first-class airports and high standard of public services.

Raimund Koch | Getty Images