Groupon moves headquarters to Berlin (German, English summary) (opens in new tab)

I really didn't want to put caps into a headline ;) You are right of course. But it seems I am not able to edit it anymore.

tl;dr: Esp. for standard positions, Berlin combines low salaries & rents with a growing (young & international) population and trustworthy German processes; bureaucracy is the same hassle all over Europe.

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Germany is no(t much) better or worse than other EU countries in terms of bureaucracy or immigration barriers. To deal with legal/ tax/ privacy stuff, you would mostly set up a formal HQ in Ireland, Luxemburg or Switzerland (the latter being home to Groupon EU's legal HQ).

The comparatively low salaries across the board in Berlin coupled with the potential for subsidies from the state make it a good proposition to have a working office. (If you're looking for engineers and highly skilled staff, Zurich and Munich still have an edge but are much more expensive.) Berlin is also large enough to have a talent pool for most positions/ departments and is growing due to perceived and/ or real attractiveness. And with the influx of young people from all over the world, informal immigration barriers like language are vanishing, too.

Berlin is dead cheap. Cheap flats, cheap office space, several universities with CS programs, a laid-back life style, good living quality in many of the inner districts.

Having hired two North Americans in Berlin (one from the US, one from Canada) I can say that the process is surprisingly streamlined and straightforward. Canada and Germany have a Youth Mobility Agreement that allows young Canadians to get their work permit within a week in Canada - for US-citizens you need to outline the reasons for hiring them over Germans and EU-citizens in writing. It suffices to state that you're looking for a native English speaker that would potentially be able to run an office in the US at some point. Done. The whole process took us less than 4 weeks and doesn't involve an attorney or any other significant legal fees. Applicants need to be able to present a bachelor's degree as a minimum though, so you wouldn't be able to hire the next Steve Jobs. Also, Berlin offers significant bang for the buck - the cost of living is (still) comparatively low and the city itself is simply amazing.

A Dutch guy I know moved to Berlin to work on his startup there. We didn't discuss the reasons, but it seems Berlin has something better to offer.

If I start guessing - probably a better startup community. Amsterdam and Netherlands are corporation-friendly, with quite some big companies having headquarters there; but startups and corporations have different needs and make different communities.

UPDATE: Another point I can think of is the size of local market.

Maybe not too important for web startups that go global right away, but if you start locally (and thus use Dutch), you have 16M people in the Netherlands (+maybe 5 in the Dutch part of Belgium), while in Germany you get 82M, five times as much; plus another 8M in Austria and some more German speakers from Switzerland.

Where do you get that Dutch immigration barriers are lower ? In my experience, that is not particularly the case.