Foreign direct investment found to be the most important stimulates factor for Thailand and Malaysia in the past decade. Thailand and Malaysia total inflow of FDI accumulated around one third of total foreign direct investment in to Southeast Asian region. This study mainly examines the macroeconomic factors impact to the inflow of FDI at aggregate data using time-series data of four main macroeconomic variables which are GDP (PPP), inflation rate, current account and exchange rate depreciate during 1980 to 2008. This study formulates an equation based on the econometric model to investigate the determinants and impacts of foreign direct investment. Consistent with the prediction of the proposed hypotheses, the findings indicate that GDP (PPP) and exchange rate depreciates are mainly important determinants of inflow FDI to encourage the inflow FDI into Thailand and Malaysia with statistical significance for both countries. Inflation rate has positive impact on the inflow of Malaysia FDI. While local currency depreciates against US dollar has positive inflow of FDI to Thailand. Hence, to the empirical study results, governance or related parts are responsible for attracting more FDI into each country and also increase the growth rate and maintain the economic stability shown in order to attract more inflow of FDI.

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