Nepal has been pursuing a liberal foreign investment policy and been striving to create an investment- friendly environment to attract FDIs into the country. The areas of investment include industrial manufacturing, services, tourism, construction, agriculture, minerals and energy.

Nepal encourages foreign investment both as joint venture operations with Nepalese investors or as 100 per cent foreign-owned enterprises. The few sectors that are not open to foreign investment are either reserved for national entrepreneurs in order to promote small local enterprises and protect indigenous skills and expertise or are restricted for national security reasons. Approval of the GoN is required for foreign investment in all sectors. No foreign investment is allowed in cottage industries. However, no restriction is placed on transfer of technology in cottage industries.