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Due to the lack of their own financial resources, attracting the foreign direct investment (FDI) isthe main prerequisite for transitional economies in order to increase production and employment, sothat they can ensure the long term sustainable economic growth. In addition, the foreign directinvestment is an important instrument for the economy restructuring, based on market principles.However, achieving this goal is not simple at all. In order to attract foreign investors, it is necessaryto create a favorable business environment in transition countries, which requires a number ofeconomic, institutional, political and other reforms. The aim of this paper is to point out the mainfactors attracting foreign direct investment and, by using the multi-criteria approach, to rank theBalkan’s transition economies depending on the preferences of investors taking into account certaincomponents of the business environment.