The article focuses on the activities of local government units (LGUs) in the Lodz voivodeship (Poland). More importantly, it compares the activities of local authorities in selected EU Member States of Central and Eastern Europe. Despite the fact, that foreign investors consider Central and Eastern Europe one area, the countries in the region differ significantly with respect to economic achievements, foreign direct investment (FDI) absorption capacity, and the approach to investment incentives. The paper aims to evaluate local government’s efforts undertaken to attract FDI in view of a comparative analysis for regions in three countries: Hungary, Poland and Romania, and a direct research involving representatives of all counties and 36% of communes in the voivodeship of Lodz. The article centres around four aspects. First, it presents comparative analysis for selected Central and Eastern Europe (CEE) regions and it reviews instruments used by the LGUs to attract FDIs. Then, it provides the evaluation of communes and counties’ preferences when it comes to attracting FDIs. The third analysed aspect is the impact of FDIs on local economies. Finally, we also identify impediments to the inflow of FDIs to communes and counties.