Abstract: China has become one of the largest economies in the world to optimize the business environment, and the original and differentiated reforms carried out by key cities have made an important contribution to this. From the perspective of institution, this paper analyzes the practice, problems and causes of the international business environment of urban construction, and puts forward an optimization path. The paper holds that improving the business environment is an interactive process in which institutional transaction costs are constantly reduced and the level of institutional openness is constantly enhanced. Improving the institutional competitiveness is the essence of promoting the business environment in cities, and helping cities to integrate into the double cycle is a major requirement to optimize the business environment in the new development era. At the same time, the three principles of marketization, legalization and internationalization respectively reflect the logic of operation, behavior and development of business environment, among which internationalization also carries the strategic intention of improving the internationalization of a city. Thus, building an international business environment has become a typical path for the city to optimize the business environment.