Foreign investment has a significant role in the economic development of the countries, since they provide an additional source of capital in conditions of insufficient domestic accumulation. In these conditions, foreign investments increase the employment of all available resources, their more efficient use and productivity increase, and more efficient inclusion of the economy in the global trends of the world economy. Attraction and retention of foreign direct investments is the primary goal of many countries. Such a form of capital plays an important role in creating new jobs, increasing competitiveness, improving overall production and reducing poverty through general economic growth and development. Bosnia and Herzegovina has failed to provide a continuous inflow of foreign investments due to a weak business environment. By creating a stimulating investment environment, economic reforms, increasing knowledge and innovation, clustering the economy and increasing the volume of public-private partnerships, Bosnia and Herzegovina can become an attractive destination for foreign investment, while stimulating domestic investments.

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