This paper tries to bring the reader closer to the concepts of foreign direct investment, economic growth and development, ways of attracting those investments, the possible effects that they may have on the state of country's economy and relations between foreign direct investments and economy's development. The importance that foreign direct investments have when it comes to country's economy is shown on the example of Republic of Croatia and some other countries that are in transition. Previous foreign investments that were given to Croatia have been focusing on the privatization of state-owned companies and the profit earned by this has been used to solve deficit problems in the state budget. The amount of FDI and its impacts are, to this day, not used fairly due to undefined goals and lack of goal achieving strategies. Also, inadequate macroeconomic policy is representing a major barrier to progress making. Attention has been paid to analysis and research that have been published in the recent years. In this way, already known theories related to FDI an economic growth are supported. The survey was conducted to check how educated the citizens of the Republic of Croatia are when it comes to foreign investment and their review of the possible outcomes. The aim of this paper is to raise awareness and educate as many people as possible about the effects that foreign investments have on country's GDP, the amount of imports and exports, employment of residents, how countries that are in transition emerge from crisis and how this could be applied to Croatian economy.