(from what I researched) To the extent that Germany wouldn't allow me to invoice foreign company as a freelancer, because it's considered false employment. The state is so nanny that wants to impose their labor protection and social security on people who visibly don't want it. In other countries, I observe there is a kind of "social contract" (at least for programmers) to allow people work through business entities, pay less taxes and get less protection, if they're competent enough to make this kinds of contracts.
> Fact is there is money to be made by employing these "protected guys", they are certainly not jobless.
They are. Portugal and Spain impose a lot of socialist regulations backed by high taxes, yet they complain about brain drain (pt) and unemployment (es). People don't want to come and open businesses to these very attractive places for relocation. Instead, cold small Estonia gets their startup boom, surprise-surprise.