Lookup Attribute - Reference attribute

We need to add a simple Lookup (Dropdown) from one BO to another.

I have tried to find the How to, or where we can create the Reference between the 2 BO's

Can anyone state explicilty where or step by step to create a Reference?

Our attributes do not have Ref / Dropdown

Thank you,
Mark Leon

My mistake in not looknig deeper.

1) When creating Attribute, choose the table or BO where the data exsists