ADRs are U.S. dollar-denominated certificates that trade on American stock exchanges and track the price of a foreign company's domestic shares. ADRs represent the prices of those shares but do not grant you ownership rights as common stock typically does. Why Do Foreign Companies List ADRs?
What are ADRs & how do they work?
ADRs offer U.S. investors a way to purchase stock in overseas companies that would not otherwise be available. Foreign firms also benefit, as ADRs enable them to attract American investors and capital without the hassle and expense of listing on U.S. stock exchanges.
How do ADRs differ from traditional stocks?
Taxes are another area where ADRs differ from traditional stocks. ADRs are subject to the same U.S. capital gains and dividend taxes as regular stocks, but taxation by the foreign country varies. Many foreign governments automatically withhold taxes on dividends paid by companies incorporated within their borders.
