Initially, foreign institutions frequently establish a representative office in Germany to asses opportunities and risks associated with market entry. These usually are related to institutions from countries outside the European Union, because they cannot use the European Passport, which is an essential facilitator of establishments. Such a representative office is not allowed to distribute their own products and services and is not allowed to do business. However, they offer a platform for the exchange of market-relevant information and for establishing preliminary contacts. Often representative offices are a preliminary stage which later leads to offering banking business in a local subsidiary or branch.