Handa Industries Co, a Hong Kong-based textile and apparel chain, has announced it will invest $250 million in Bangladesh.

Handa Industries Ltd. Chairman Han Chun announced the plan while meeting with Chief Adviser Professor Muhammad Yunus at the State Guest House Jamuna on Tuesday, according to the Chief Adviser's Press Wing.

Handa had initially planned to invest $150 million in Bangladesh’s textile sector and signed a memorandum of understanding with the Bangladesh authorities during the Bangladesh Investment Summit in April 2025.

Following further assessments and with strong support from Bangladesh authorities, Handa has since increased its investment plan to approximately $250 million.

The company has now decided to set up three factories in Bangladesh—two garment processing and one knitting and dyeing unit—which are expected to create 25,000 jobs.

“We decided to increase our investment as we got confidence after talks with the officials of the government agencies including BIDA (Bangladesh Investment Development Authority), BEZA (Bangladesh Economic Zones Authority) and BEPZA (Bangladesh Export Processing Zones Authority)” said Han Chun.

“We would like to bring the latest technologies to Bangladesh’s garment and textiles industries through our projects,” he said.

BIDA, BEZA and BEPZA officials said this is one of largest single Chinese investments in Bangladesh’s textile sector.

Chief Adviser Professor Muhammad Yunus welcomed the investment plan of Handa Industries Ltd.

“You take the leadership in Chinese investment in Bangladesh’s textile sector and encourage other Chinese investors to come here,” he said.

He also urged Handa Industries Ltd. to train up Bangladeshi designers to enable them to learn the taste of buyers.

Han Chun presented the Chief Adviser a design of their factory that they are going to set up in the Mirsharai economic zone.

“It looks like a beautiful painting to me,” said the Chief Adviser, hailing the design.

The land lease agreement for the garment factory in Mirsharai will be signed on Wednesday with an investment value of 80 million USD in phase-1.

The finalisation of land and other facilities for phase-2 is under process now and is expected to be finished by the end of 2025.

BIDA executive chairman Chowdhury Ashik Mahmud bin Harun, Principal Secretary, Md. Siraj Uddin Miah, principal coordinator for Sustainable Development Goals (SDG), Lamiya Morshed, BEPZA executive chairman Abul Kalam Mohammad Ziaur Rahman, and Handa Industries Ltd. President Heng Zeli were present at the meeting.

MSH

Companies and organisations will be required to file tax returns on the income generated by employee welfare funds from the current fiscal year and pay a 27.5 percent tax on the earnings. 

The Income Tax Act 2023 incorporates the provision, lifting the tax exemption and amnesty on the compulsion to file returns for funds such as provident funds, gratuity funds and workers' profit participation funds maintained by the private sector.

The law, however, has exempted government-managed provident funds from taxation, raising questions.

TIM Nurul Kabir, executive director of the Foreign Investors' Chamber of Commerce & Industry, said there were many other avenues to collect tax.

"Employees benefit from provident funds after their retirement. So, the authority should not slap taxes on retirement benefit."

He said while levying the tax, the government has not treated provident funds of the private and public sectors equally.

"It is discriminatory," he said, adding that they would appeal to the tax authority for the withdrawal of the tax on income from provident funds.

Debabrata Roy Chowdhury, director for legal, regulatory and corporate affairs at Nestlé Bangladesh PLC, said the introduction of income tax on trust funds would lower the overall income from such schemes.

"This will have an adverse long-term impact on retired employees of private organisations."

Chowdhury urged the authority to address the issue in line with the spirit of the government's initiatives aimed at ensuring social security for private sector employees.

"The recent introduction of the universal pension scheme for private sector employees is a good example of that."

A senior official of the NBR, on condition of anonymity, said the income of government-managed provident funds was exempted in line with the Provident Fund Act 1925.

He said provident funds under the private sector had been historically exempted and there was no requirement to submit tax returns. As a result, it was unclear whether the funds were properly utilised.

"From now onwards, we will see proper disclosure."

The tax official said the contribution of payroll tax is about 3 percent of the total income tax although it should increase as the economy is growing.

Md Shahadat Hossain, a former president of the Institute of Chartered Accountants of Bangladesh, said income from investment in savings certificates, where people invest as a source of future earnings, is already taxed.

"From that perspective, the imposition of tax on provident and other employee welfare funds seems okay."

However, Towfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue, said social protection for private sector employees was low.

"Provident and other workers' welfare-related funds provide little social protection. The imposition of tax will increase inequality. But there can't be any discrimination in taxation between private and government provident funds."

Khan, citing the latest income tax law that replaced the Income Tax Ordinance 1984, said the NBR tried to find new avenues to increase tax collection and improve the nation's revenue-gross domestic product ratio, which is one of the lowest in the world.

"We can see the desperation of the tax authority to boost collection. This ultimately reveals the inability of the NBR to catch the tax evaders and illicit money makers."