Abstract

Research has shown that foreign direct investments benefit the economic development of a host country. However, numerous examples of an inadequate investment structure point to the possible damages for an economic, as well as socio- political development of a country. The purpose of this paper is to looks into the structure of total foreign direct investments realised in the Republic of Croatia and, by using scientific methods, analyse the importance and the effect of foreign direct investments on the Croatian economy. Through following world’s the best practice, the paper offers a comparative analysis of the Republic of Croatia and the countries of the region, with the purpose of identifying the institutional obstacles for investment and producing a detailed SWOT analysis of the Republic of Croatia as an investment destination. Despite numerous existing conventions and protocols, a desired degree of adjustment to international conventions has not yet been achieved, which hinders investment. The Government should create a protection mechanism in order to keep the investors in the times of crisis, as well as policy of attracting the strategically oriented investments that will facilitate long-term economic growth. The first method through which it is possible to define a strategy of attracting strategically oriented investments into the economy, is the qualitative identification of the Republic of Croatia as an investment destination through SWOT analysis.