This paper analyzes the impact of foreign direct investment on the competitiveness of Croatia and Slovenia. Using the presentation of macroeconomic indicators and the structure of foreign investments, a detailed picture of the characteristics of the market is given. Both the Croatian and Slovenian markets are relatively small, but their location makes them attractive for foreign investors. They are trying to attract investors to the market and direct them to regions and sectors of activity that are less developed. The reason that economies open up to foreign capital inflows is that they believe that foreign direct investment will have a positive impact on economic growth. The paper also explains the influence of foreign investments on indicators of economic competitiveness on the market. Based on the data, it was concluded that the impact of foreign investments depends on the sector in which the investment is made and in what form. If investments are made in an underdeveloped sector and new branches are opened, there will be an increase in the number of employees and an increase in the competitiveness of the sector. Finally, the paper proves that foreign direct investments have no influence on indicators of the competitiveness of Croatia and Slovenia, such as GDP, GDP p.c., import and export of services and the unemployment rate. Although the connection between the level of foreign investments and competitiveness indicators has not been confirmed, the impact that investments have on the market is positive due to the improvement of business conditions and access to modern technology.