An American Depositary Share (ADS) is a U.S. dollar-denominated equity share of a foreign-based company. They are issued by a U.S. depositary bank, and represents one or more shares of the foreign company's stock. ADSs make it easier for U.S. investors to invest in foreign companies, as they are able to buy and sell shares through U.S. securities markets, without the need to convert currency or deal with foreign market regulations.

ADSs are often used by foreign companies to raise capital in the U.S., as it expands their investor base beyond their home country and allows them to tap into U.S. capital markets. For example, a Chinese company may issue ADSs on a U.S. exchange, giving American investors the opportunity to invest in the company while still trading in dollars rather than Chinese yuan.

ADSs are subject to the laws and regulations of both the U.S. and the company's home country. The process of issuing ADSs involves the appointment of a depositary bank to facilitate the transaction, and the filing of registration documents with the U.S. Securities and Exchange Commission.

Overall, ADSs represent an important tool for both U.S. investors and foreign companies looking to raise capital on global markets.