Honestly, in my view it's not an issue of overregulation but a malfunctioning administrative apparatus. Too much power is concentrated in the hands of few administrators who can interpret the law according to their own vibes, leaving businesses with few options of recourse without resorting to spending money on lawyers. It's the mideval mindset in the local administration that makes it so difficult, not the regulations per se.
The is a really eye opening interview with Marco Scheel from the small German company Nordwolle, where he describes the daily struggle with German administratives: https://dts.podtrac.com/redirect.mp3/files.lagedernation.org...