ObjectiveThis study was conducted to comprehensively understand the context, barriers, and opportunities for improving dementia care, treatment, and support. The objective is to guide the development of a national dementia care plan.MethodologyThis document review was conducted by analyzing literature available in the public domain, including scientific publications, project documents/reports, media reports, and hospital records. Additionally, annual reports published by the Department of Health Services, national census and demographic and health survey reports, Old Age Homes, and other relevant government reports were examined. Firsthand information was gathered from relevant stakeholders based on the World Health Organization's situational analysis framework for dementia plans. This framework encompasses four domains: Policy context (national ministries, legislation, policies, strategies, plans related to dementia, mental health, aging, and disability), service delivery assessment (health and social care workforces, services, support and treatment programmes, and promotion of awareness and understanding), and epidemiological indicators (prevalence and incidence rates of dementia, risk factors). Ethical clearance was obtained from the Institutional Review Committee (IRC) of B.P. Koirala Institute of Health Sciences (IRC no.2658/023).ResultsExisting policies in Nepal inadequately address the needs of people with dementia and their caregivers. Concerning health services, the Government of Nepal provides financial subsidies to individuals diagnosed with dementia; however, numerous hurdles impede access to care. These obstacles include geographical and structural barriers, an inefficient public healthcare system, weak governance, financial constraints, low awareness levels, stigma, and inadequate workforce. Furthermore, the absence of robust nationally representative epidemiological studies on dementia in Nepal hampers the development of evidence‐based plans and policies. Similarly, there are no interventions targeted at caregivers of people with dementia, and no initiatives for dementia prevention are in place.ConclusionsThis review underscores the urgent need to formulate a comprehensive national dementia care plan to address the growing challenges. Key priority action areas include the integration of dementia care into primary healthcare services, training workforce to provide the care, increasing awareness, mitigating stigma, developing caregiver support programs, and initiating high‐quality research to inform evidence‐based policymaking.