Disclaimer, I'm not an expert and I have only second-hand knowledge of founding. But from what I've seen, the local authorities are quite willing to do some hand-holding and answer questions. Registering a basic business (Gewerbe / Gbr / Selbstständiger) with the Finanzamt is easy, I think you also have to register with the chamber of commerce (Industrie und Handelskammer) and pay a small fee, but they also offer support for founders.<p>No matter where you incorporate, you'll likely have to pay some taxes in Germany if you are based here. You'll also have to pay social insurances for your employees, which are quite high. In any case, I'd recommend to get an accountant even before a lawyer. They can take care of the payroll accouting (even if it is just for yourself and your co-founder), social insurances, and taxes, and are not too expensive.<p>So if you are just setting up a business entity, I would just do it where you are based, since you have the paperwork anyway and doing it here gives you the ability to just walk up to the local offices if needed. However, I don't know what the answer is if you want to found a limited corporation (GmBH). There is not the universal "Delaware company" in Europe as far as I know. Some of our multinational customers incorporated in Ireland for tax savings, but I don't know at which scale that would make sense.