An American depositary receipt (ADR) or global depositary receipt (GDR) is a simple way for investors to invest in companies whose shares are listed abroad.
The ADR or GDR is essentially a certificate issued by a bank that gives the owner rights over a foreign share. It can be listed on a stock exchange and bought and sold just like a normal share.
The holder of an ADR or GDR is entitled to all benefits such as dividends and rights issues from the underlying shares. They are sometimes – but not always – able to vote.
As you might expect from the name, an ADR is listed in the US. A GDR is typically listed in London or Luxembourg. A depositary receipt where the issuing bank is European will sometimes be called a European Depositary Receipt (EDR), although this term is less common.