Foreign direct investments (FDI) are important influencing factors to a countrys economy, as they have an impact on the implementation and integration of trans-formational processes in countries with a so-called transitional economy, by influx of new technologies and modern know-how, by developing on-site infrastructure, and so on. This master thesis analyses the effect of key aspects of the investment climate on FDI in Ukraine. Compared to other Central and Eastern European (CEE) countries having the status of a transformational economy, Ukraine has had relatively low FDI inflows since its declaration of independence in 1991. This scientific paper contrasts the economic and political situation in Ukraine to the FDI volumes so far received, and is answering the main research question “Which aspects of the investment climate in Ukraine (economic or political ones) have a major impact on the FDI?”. In order to answer this question the author researched the political situation, reforms and changes in law that were undertaken and how it influenced the investment climate. In the context of a broad literature review of analogue and digital publications, the data were collected and analysed in order to answer the research questions. In this research, the reports of the International Monetary Fund, the World Bank Group data, Group reports of the European Commission as well as the State Statistics Committee Ukraine, were essential sources. The results of the analysis lead to a conclusion that the political instability in Ukraine is a major risk factor that negatively affects the investment climate and respectively the FDI volumes. High level of corruption even worsens the political crisis. The fur-ther research can focus on the question of how to minimize the political risk while investing in Ukraine.