||The main objective of this thesis is to provide a reader with a complex overview concerning foreign direct investment (FDI) and its determinants. Stress is laid on the assessment of the situation in the Czech Republic. The exact definition of FDI and its various classifications are introduced. Furthermore, history of Czech as well as worldwide flows of FDI is explored, followed by an analysis of current problematic aspects of foreign direct investment, such as investment incentives schemes offered by local governments and their justification, or possible negative impacts of FDI. Another chapter examines results of several empirical studies in sense of identification FDI’s determinants with respect to Central and Eastern European countries. The very end of the thesis is devoted to an econometric model using panel data of Czech manufacturing industries. The model is focused on determining factors of FDI inflows into the economy.