![]() ![]() These companies also file required disclosure statements with the Securities and Exchange Commission.Ĭompanies that meet all US reporting and disclosure rules are permitted to raise capital directly from US investors by issuing new stock specifically to be represented by ADRs. However, like investment gains or income from domestic securities, proceeds from an ADR holding may be subject to US income or capital gains taxes and may be subject to backup withholding.įoreign companies that sponsor listed ADR programs in the United States issue financial reports in English, and these reports generally conform to US accounting conventions. And for those countries that maintain tax treaties with the US, dividends are paid without foreign withholding. Both ADRs and GDRs are usually denominated in US dollars, but may also be denominated in euros.ĪDR investors are not subject to non-US stock transaction taxes. GDRs are offered to investors in 2 or more markets and are most commonly used to raise capital in Europe and the United States. In addition to ADRs, Global Depositary Receipts (GDRs) give issuers exposure to the global markets outside their home market. Those that are listed can be traded, settled, and held as if they were ordinary shares of US-based companies. ADRs may be listed on a major exchange such as the New York Stock Exchange or may be traded over the counter (OTC). The ratio of foreign shares to one ADR will vary from company to company, but each ADR for any one company will represent the same number of shares. It represents one or more shares of foreign-company stock held by that bank in the home stock market of the foreign company. An ADR is issued by an American bank or broker. These and many other companies based outside the US list their shares on US exchanges through ADRs.ĪDRs are a form of equity security that was created specifically to simplify foreign investing for American investors. ![]() They represent some of the most familiar companies in global business, including household names such as Nokia, Royal Dutch Petroleum (maker of Shell gasoline), and Unilever. American Depositary Receipts (ADRs) offer US investors a means to gain investment exposure to non-US stocks without the complexities of dealing in foreign stock markets. ![]()
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