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Sharing to external users is not supported

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Symptom

A user at our tenant is not able to share files with external users. This issue is occurring for the Office Group, when the user tries to share a folder from the "Documents", with an external user, the following message appears "Sharing to external users is not supported". However when a colleague shares a document with the same external user account, the sharing is successful.

The affected user has created a new Office group and tried to share a document with an external user, however the same message appeared.

In the Office Admin Center, Security & Privacy, the tenant has the following settings:

  • Let users add new guests to the organization - on
  • Let users share SharePoint Online and OneDrive for Business content with people outside the organization - on
  • Users can share with - new and existing external users (sign-in required)

In the SharePoint Admin center:

  • Allow users to invite and share with authenticated external users
  • Let only users in selected security groups share with authenticated external users

Cause

The user was not part of one of the security groups in SharePoint Admin Center

Resolution

Added user to the any security group in SharePoint Admin Center and after was able to now able to share files and folders with external users.