No, the other file does not have to be in the same folder. You can link to a file located anywhere on your computer or on a network by specifying the file path in the formula.

For example, if the source file is located at "C:\Users\UserName\Documents\\", the formula would look like this:
```
='C:\Users\UserName\Documents\[Source.xlsx]Sheet1'!$A$1:$C$10
```

Note that if you move or rename the source file, the link will break and you'll need to update the file path in the formula.
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