The role of Foreign Direct Investment (FDI) in the Brazilian economy has become increasingly important over the last decades. Still, the distribution of the investment projects across the Brazilian federation units demonstrated significant heterogeneity. The purpose of this work is to investigate the determinants for the allocation of foreign direct investment across Brazilian states. To achieve this goal is made a literature review on the economic theories developed over foreign direct investment (FDI) and on the empirical literature on the locational determinants for FDI. Additionally, is assessed the role of foreign investment in the development of the Brazilian economy focusing on the industrialization process and the distribution across sectors, investor country, and regional distribution.