# Global Depositary Receipt (GDR): How International Investors Access Foreign Stocks Published: 2026-03-05 Author: Warren Team URL: https://www.heywarren.com/blog/global-depositary-receipt --- Global Depositary Receipts give investors in one country a practical way to own shares in a company incorporated in another country — without navigating foreign stock exchanges, currency accounts, or local custody rules. Here's exactly how GDRs work, who issues them, and how they compare to American Depositary Receipts. ## What Is a Global Depositary Receipt (GDR)? A **Global Depositary Receipt (GDR)** is a bank certificate representing ownership of shares in a foreign company. The shares themselves are held by a depositary bank in the company's home country; the GDR trades on international exchanges as a proxy for those underlying shares. **Key mechanics**: - A depositary bank (Citibank, JPMorgan, Deutsche Bank, BNY Mellon) holds the actual shares - The depositary issues GDR certificates backed by those shares - GDRs trade on major international exchanges (London Stock Exchange, Luxembourg Stock Exchange, Singapore Exchange) - Each GDR represents a fixed ratio of underlying shares (e.g., 1 GDR = 10 underlying shares) GDRs allow a single company to list on multiple markets simultaneously — attracting international capital without requiring investors to open brokerage accounts in the company's home market. ## GDR vs. ADR: Key Differences | Feature | GDR | ADR | |---|---|---| | Full name | Global Depositary Receipt | American Depositary Receipt | | Listed on | International exchanges (LSE, Luxembourg, Singapore) | US exchanges ([NYSE](https://www.nyse.com/), NASDAQ, OTC) | | Denominated in | USD, EUR, or GBP | USD only | | Regulated by | Varies by listing exchange | SEC (US Securities laws) | | Primary investors | European and institutional investors globally | US investors | | Capital raising | Often used for international capital raise | Used to access US [capital markets](/blog/capital-markets-def) | **ADRs** are a specific type of depositary receipt listed in the United States and regulated by the SEC. **GDRs** are broader — designed for listing on international exchanges outside the company's home country, often targeting European institutional investors. A single company may have both an ADR (for US investors) and a GDR (for European/global investors). For example, Indian technology companies often issue ADRs on NASDAQ and GDRs on the London Stock Exchange simultaneously. ## How a GDR Is Created The process of creating GDRs follows a standard structure: ![Six-step process from company decision to GDR trading on an international exchange.](data:image/svg+xml,%3Csvg%20xmlns%3D%22http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg%22%20viewBox%3D%220%200%201090%20125%22%20width%3D%221090%22%20height%3D%22125%22%20role%3D%22img%22%3E%3Ctitle%3EFlow%20diagram%3C%2Ftitle%3E%3Crect%20width%3D%22100%25%22%20height%3D%22100%25%22%20fill%3D%22%23f8fafc%22%2F%3E%3Crect%20x%3D%2230%22%20y%3D%2225%22%20width%3D%22170%22%20height%3D%2275%22%20rx%3D%2210%22%20fill%3D%22white%22%20stroke%3D%22%232563eb%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22115%22%20y%3D%2258.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ECompany%3C%2Ftext%3E%3Ctext%20x%3D%22115%22%20y%3D%2278.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3Edecides%20to%20list%3C%2Ftext%3E%3Cline%20x1%3D%22205%22%20y1%3D%2262.5%22%20x2%3D%22237%22%20y2%3D%2262.5%22%20stroke%3D%22%2364748b%22%20stroke-width%3D%222%22%2F%3E%3Cpolygon%20points%3D%22244%2C62.5%20235%2C57.5%20235%2C67.5%22%20fill%3D%22%2364748b%22%2F%3E%3Crect%20x%3D%22245%22%20y%3D%2225%22%20width%3D%22170%22%20height%3D%2275%22%20rx%3D%2210%22%20fill%3D%22white%22%20stroke%3D%22%232563eb%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22330%22%20y%3D%2258.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EDepositary%20Bank%3C%2Ftext%3E%3Ctext%20x%3D%22330%22%20y%3D%2278.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3Ee.g.%20BNY%20Mellon%3C%2Ftext%3E%3Cline%20x1%3D%22420%22%20y1%3D%2262.5%22%20x2%3D%22452%22%20y2%3D%2262.5%22%20stroke%3D%22%2364748b%22%20stroke-width%3D%222%22%2F%3E%3Cpolygon%20points%3D%22459%2C62.5%20450%2C57.5%20450%2C67.5%22%20fill%3D%22%2364748b%22%2F%3E%3Crect%20x%3D%22460%22%20y%3D%2225%22%20width%3D%22170%22%20height%3D%2275%22%20rx%3D%2210%22%20fill%3D%22white%22%20stroke%3D%22%232563eb%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22545%22%20y%3D%2258.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ECustodian%20Bank%3C%2Ftext%3E%3Ctext%20x%3D%22545%22%20y%3D%2278.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3Eholds%20shares%20locally%3C%2Ftext%3E%3Cline%20x1%3D%22635%22%20y1%3D%2262.5%22%20x2%3D%22667%22%20y2%3D%2262.5%22%20stroke%3D%22%2364748b%22%20stroke-width%3D%222%22%2F%3E%3Cpolygon%20points%3D%22674%2C62.5%20665%2C57.5%20665%2C67.5%22%20fill%3D%22%2364748b%22%2F%3E%3Crect%20x%3D%22675%22%20y%3D%2225%22%20width%3D%22170%22%20height%3D%2275%22%20rx%3D%2210%22%20fill%3D%22white%22%20stroke%3D%22%232563eb%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22760%22%20y%3D%2258.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EGDR%20Issued%3C%2Ftext%3E%3Ctext%20x%3D%22760%22%20y%3D%2278.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3Eto%20investors%3C%2Ftext%3E%3Cline%20x1%3D%22850%22%20y1%3D%2262.5%22%20x2%3D%22882%22%20y2%3D%2262.5%22%20stroke%3D%22%2364748b%22%20stroke-width%3D%222%22%2F%3E%3Cpolygon%20points%3D%22889%2C62.5%20880%2C57.5%20880%2C67.5%22%20fill%3D%22%2364748b%22%2F%3E%3Crect%20x%3D%22890%22%20y%3D%2225%22%20width%3D%22170%22%20height%3D%2275%22%20rx%3D%2210%22%20fill%3D%22white%22%20stroke%3D%22%232563eb%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22975%22%20y%3D%2258.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EExchange%3C%2Ftext%3E%3Ctext%20x%3D%22975%22%20y%3D%2278.5%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2211%22%20fill%3D%22%2364748b%22%3ELSE%20%2F%20Luxembourg%3C%2Ftext%3E%3C%2Fsvg%3E) *Six-step process from company decision to GDR trading on an international exchange.* **1. Company decision**: The issuing company decides to raise capital internationally or increase liquidity for existing shareholders. **2. Depositary bank agreement**: The company appoints a depositary bank (BNY Mellon is the market leader; also Citibank, Deutsche Bank, JPMorgan). **3. Custodian bank**: A local custodian bank in the company's home country holds the physical or book-entry shares. **4. Share deposit**: Shares are transferred to the custodian and "blocked" — they back the GDR certificates issued in international markets. **5. GDR issuance**: The depositary bank issues GDR certificates to investors purchasing in the international market. **6. Trading**: GDRs trade on the target exchange (e.g., London Stock Exchange) in USD or EUR, exactly like ordinary shares. ## Pricing and Arbitrage GDR prices track the underlying share price, adjusted for the GDR ratio and exchange rate: **Theoretical GDR price** = (Underlying share price × GDR ratio) × FX rate **Example**: An Indian company's shares trade on BSE at ₹500. One GDR = 10 shares. USD/INR = 83. Theoretical GDR price = (₹500 × 10) / 83 = **$60.24** If the GDR trades at a significant premium or discount to this theoretical price, arbitrageurs will buy in the cheaper market and sell in the dearer one — keeping GDR and underlying prices aligned. This arbitrage mechanism is what makes depositary receipts efficient pricing instruments. ## Types of GDR Programs **Sponsored GDR**: The issuing company actively establishes and supports the GDR program — provides information, assists with regulations, and may have SEC/exchange registration. Most GDRs listed on major exchanges are sponsored. ![Four main GDR program structures, from fully sponsored exchange listings to private institutional placements.](data:image/svg+xml,%3Csvg%20xmlns%3D%22http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg%22%20viewBox%3D%220%200%20760%20211%22%20width%3D%22760%22%20height%3D%22211%22%20role%3D%22img%22%3E%3Ctitle%3EHierarchy%3C%2Ftitle%3E%3Crect%20width%3D%22100%25%22%20height%3D%22100%25%22%20fill%3D%22%23f8fafc%22%2F%3E%3Crect%20x%3D%22300%22%20y%3D%2220%22%20width%3D%22160%22%20height%3D%2258%22%20rx%3D%228%22%20fill%3D%22%232563eb%22%2F%3E%3Ctext%20x%3D%22380%22%20y%3D%2254%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2214%22%20font-weight%3D%22700%22%20fill%3D%22white%22%3EGDR%20Programs%3C%2Ftext%3E%3Cpath%20d%3D%22M%20380%2078%20L%20380%20105.5%20L%20110%20105.5%20L%20110%20133%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%20fill%3D%22none%22%2F%3E%3Crect%20x%3D%2230%22%20y%3D%22133%22%20width%3D%22160%22%20height%3D%2258%22%20rx%3D%228%22%20fill%3D%22white%22%20stroke%3D%22%230891b2%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22110%22%20y%3D%22158%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ESponsored%3C%2Ftext%3E%3Ctext%20x%3D%22110%22%20y%3D%22176%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3ECompany-supported%3C%2Ftext%3E%3Cpath%20d%3D%22M%20380%2078%20L%20380%20105.5%20L%20290%20105.5%20L%20290%20133%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%20fill%3D%22none%22%2F%3E%3Crect%20x%3D%22210%22%20y%3D%22133%22%20width%3D%22160%22%20height%3D%2258%22%20rx%3D%228%22%20fill%3D%22white%22%20stroke%3D%22%230891b2%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22290%22%20y%3D%22158%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3EUnsponsored%3C%2Ftext%3E%3Ctext%20x%3D%22290%22%20y%3D%22176%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3EOTC%2C%20no%20co.%20involvement%3C%2Ftext%3E%3Cpath%20d%3D%22M%20380%2078%20L%20380%20105.5%20L%20470%20105.5%20L%20470%20133%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%20fill%3D%22none%22%2F%3E%3Crect%20x%3D%22390%22%20y%3D%22133%22%20width%3D%22160%22%20height%3D%2258%22%20rx%3D%228%22%20fill%3D%22white%22%20stroke%3D%22%230891b2%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22470%22%20y%3D%22158%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ERule%20144A%3C%2Ftext%3E%3Ctext%20x%3D%22470%22%20y%3D%22176%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3EUS%20QIBs%20only%3C%2Ftext%3E%3Cpath%20d%3D%22M%20380%2078%20L%20380%20105.5%20L%20650%20105.5%20L%20650%20133%22%20stroke%3D%22%23cbd5e1%22%20stroke-width%3D%222%22%20fill%3D%22none%22%2F%3E%3Crect%20x%3D%22570%22%20y%3D%22133%22%20width%3D%22160%22%20height%3D%2258%22%20rx%3D%228%22%20fill%3D%22white%22%20stroke%3D%22%230891b2%22%20stroke-width%3D%222%22%2F%3E%3Ctext%20x%3D%22650%22%20y%3D%22158%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2213%22%20font-weight%3D%22600%22%20fill%3D%22%230f172a%22%3ERegulation%20S%3C%2Ftext%3E%3Ctext%20x%3D%22650%22%20y%3D%22176%22%20text-anchor%3D%22middle%22%20font-family%3D%22system-ui%2C-apple-system%2Csans-serif%22%20font-size%3D%2210%22%20fill%3D%22%2364748b%22%3ENon-US%20investors%3C%2Ftext%3E%3C%2Fsvg%3E) *Four main GDR program structures, from fully sponsored exchange listings to private institutional placements.* **Unsponsored GDR**: A depositary bank creates the GDR program without the company's active involvement. These are typically OTC-traded, less regulated, and less common for major listings. **Rule 144A GDR**: GDRs sold only to [Qualified Institutional Buyers (QIBs)](/blog/qualified-institutional-buyers) in the US under SEC Rule 144A — allowing US institutional investors to access international listings without full SEC registration. **Regulation S GDR**: Offered and sold outside the US under SEC Regulation S, allowing non-US investors to buy without SEC registration. ## Who Issues GDRs? GDRs are common for companies from: **Emerging markets**: Indian, Chinese, Brazilian, Russian (pre-sanctions), and Eastern European companies use GDRs to access international capital markets. **Companies with large international investor bases**: When a significant portion of a company's shareholders or customers are outside its home market, a GDR listing facilitates their participation. **Capital raising**: Companies issuing new shares internationally often use GDR structure — capital raised flows back to the company in foreign currency. **Examples**: Infosys GDRs traded on NYSE (ADR) and London (GDR). Many BRICS-era companies — Gazprom, Lukoil, Petrobras, ICICI Bank — established GDR programs on the LSE and Luxembourg exchanges. ## Rights and Dividends GDR holders receive economic benefits equivalent to direct shareholders: **Dividends**: The depositary bank collects dividends from the underlying shares, converts to the GDR currency (minus conversion fees), and distributes to GDR holders. **Voting rights**: Depending on the program structure, GDR holders may be able to vote on corporate matters — the depositary votes according to GDR holder instructions or abstains. **Corporate actions**: Stock splits, rights offerings, and other corporate actions are passed through to GDR holders — adjusted for the GDR ratio. **Fees**: Depositary banks charge service fees for GDR administration — typically deducted from dividends. Fees are usually small ($0.02–$0.05 per GDR per year) but worth knowing. ## Risks of GDR Investing **Currency risk**: GDRs eliminate the need for foreign currency accounts, but exchange rate moves between the underlying share currency and GDR currency still affect returns. **Political and regulatory risk**: A company's home country political environment — sanctions, capital controls, nationalization — directly affects GDR holders. Russian GDRs became untradeable after 2022 sanctions. **Liquidity risk**: GDRs trade in a secondary market. Volume can be thin for smaller programs, resulting in wide bid-ask spreads. **Tracking error**: GDR prices can temporarily deviate from the theoretical underlying price, especially in volatile markets or when cross-border arbitrage is restricted. **Limited rights**: Some GDR programs limit voting rights or have administrative delays in passing through corporate actions. ## GDRs vs. Direct Foreign Investment | Approach | GDR | Direct foreign stock purchase | |---|---|---| | Currency account needed | No | Yes | | Settlement | Standard (T+2 on listing exchange) | Varies by country | | Withholding tax complexity | Depositary handles | Investor handles | | Access to information | Depositary provides | Investor must source directly | | Convenience | High | Lower | | Cost | Small depositary fees | Brokerage fees, currency conversion | For most retail investors, GDRs are far more accessible than direct foreign market investment. For large institutional investors with dedicated international capabilities, direct investment may sometimes be more cost-efficient. ## Authoritative Sources For deeper background and primary-source data on this topic, the following authoritative sources are useful starting points: - [SEC — Securities and Exchange Commission](https://www.sec.gov/) - [FINRA](https://www.finra.org/) ## Conclusion Global Depositary Receipts are the financial infrastructure that lets capital flow across borders without requiring investors to navigate foreign markets, currencies, or custody systems. For companies, GDRs expand the investor base and access to international capital. For investors, GDRs provide a relatively convenient path to owning shares in foreign companies through familiar domestic or international exchanges. The key practical considerations — currency risk, depositary fees, and liquidity — are manageable for most well-established GDR programs. For related international investment topics, see our guides on [foreign invested enterprises](/blog/foreign-invested-enterprise), [most favored nation clauses](/blog/most-favored-nation), and [SDRs (Special Drawing Rights)](/blog/sdrs-definition). Warren at [heywarren.com](https://heywarren.com) helps investors track international equity positions, including depositary receipts, across global markets in a single portfolio view. --- ## Related Reading **More from Warren**: - [Guaranteed Investment Fund (GIF): How It Works, Benefits, and Risks](/blog/guaranteed-investment-fund) - [Portfolio Management Service (PMS): What It Is and How It Works](/blog/portfolio-management-service) - [Special Drawing Rights (SDRs): What They Are and How the IMF's Reserve Asset Works](/blog/sdrs-definition) **Authoritative sources**: - [SEC Investor.gov — Investing Basics](https://www.investor.gov/introduction-investing/investing-basics) - [FINRA — Investor Education](https://www.finra.org/investors)