Atmosphere in firm in the capital (5)
I believe the answer is:
cairo
'capital' is the definition.
(Cairo is an example)
'atmosphere in firm' is the wordplay.
'atmosphere' becomes 'air' ('air' can be a synonym of 'atmosphere').
'in' indicates putting letters inside.
'firm' becomes 'co' (a firm is a company).
'air' going into 'co' is 'CAIRO'.
'in the' acts as a link.
(Other definitions for cairo that I've seen before include "North African capital" , "Al Qahira" , "City near the Nile delta" , "Egyptian capital" , "Egypt's capital" .)