Developing countries are working to attract more foreign investment by making their policies more welcoming to foreign businesses. South Asia and China are examples of regions trying to increase foreign investment through policy changes. However, small countries like Nepal face challenges in attracting foreign investment due to limited resources and infrastructure. The study reviews government policies and surveys foreign firms to understand the obstacles in attracting foreign investment to Nepal. The key takeaway is that ongoing policy reforms are crucial for attracting foreign direct investment in developing countries.