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Protection of property rights and private capital, freedom to conduct economic and other activities, principles of market economy are guaranteed by the Constitution of Bosnia and Herzegovina. On the other hand, promotion and protection of FDI as well as open economic policy based on market principles, is provided by the other legal acts. FDI are protected from any form of discrimination. In that sense foreign investors have certain customs privileges, right for free transfer of profit abroad, the same treatment on the acquisition of property rights as citizens, and other rights in investing. Despite the foregoing, improvement of business climate requires appropriate solution of other issues, particularly those relating to the implementation of recommendations and guidelines of the European Union in this area, international standards and practice of investment, as well as wider involvement of private sector by some new institutes such as public-private partnerships. The paper indicates on the mutual compatibility between national and international legal framework in the field of FDI in Bosnia and Herzegovina, their eligibility in the application of instruments which affect their growth and protection. Some of these instruments and procedures, such as privatization and concessions, contribute the inflow of FDI. On the other hand, benefits of public-private partnership are not fully recognized. [ABSTRACT FROM AUTHOR]