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Abstract
Foreign direct investment as the most common form of international capital movements are very important factors in the development of each economy. Given the fact its characteristics in terms of the impact on long-term economic development, foreign direct investment offer the possibility of achieving goals of sustainable development. In the terms that the effects of foreign capital does not manifest in the same way at all levels in the host country, the paper gives the importance of foreign direct investment for strength the capacity of local communities in achieving the goals of sustainable development. The point of the paper is to show movement of foreign direct investments in municipalities and cities in Serbia and to provide useful recommendations for improving the business climate to attract foreign direct investment in local communities. Starting from the fact that the needs of local communities in Serbia to attract foreign direct investment are big, at the end of the paper it is given that investment location are the most important determinants of the host country by foreign investors when making investment decisions