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I have the opertunity to build a new domain in this project.

If we selected an internal domain of internal.companyindustry.com for example, would that allow passing email address of companyindustry.com without using Azure AD connect, or would we need use AD Connect and a matching UPN?

The domain email accounts do not match the domain in this case. It's similar to the following:

Active Directory Domain is Company.local

Email address is use@ CompanyIndustry.com

Would we need to set up AzureAD sync to get this to work in this case.