Where should I set up my global internet business?

The first answers here accept the basic premise of the question, that one should consider incorporating overseas to benefit from lower tax levels / less regulatory overhead / more streamlined intellectual property regulation, etc.

I'm going against the grain, and say that 99% of all entrepreneurs should not consider this, they should initially focus on creating wealth. And in practical terms, that typically boils down to a) incorporate where you live right now, or b) move to a well know startup hub like Silicon Valley, and incorporate there.

Is there a widely recognised 'best place of business' for global social-media style internet businesses,

Yes there is, it is Silicon Valley.

Considerations I'm thinking about are taxation, regulation, intellectual property, structure. And what else should I be thinking about?

You should worry less about the things you mention, and worry more about:

• Potential for finding awesome co-founders.
• The potential for finding risk-willing capital (Angel / VC money).
• Potential for finding great like-minded startups to cooperate with.
• Strength of the startup venue at large, i.e. entrepreneur meetups, associations, etc.
• Quality of life and family connections, i.e. how would you feel about living there for 3-5 years, will it boost your energy level or reduce it?

If you ever get super-successful, then it is possible to fix tax levels and intellectual property issues retroactively. You can hire professionals to reduce your tax bills or strengthen your intellectual property defenses if you need this. But get successful first -- that's the hardest part, and incorporating overseas before success is premature optimization.

The answer is that it depends on a few things:

1. Where you live. Mostly if you live in the US, Canada, Australia, UK and you want to operate legally you should have your business in your country in order to avoid potential tax disadvantages of operating the business offshore. If you live in a place that does not tax you on your worldwide income you should start your business in an offshore tax free location and you will not have to pay taxes! If you live in most of the western world you will have to pay tax if you want to do things legally, and so the easiest option is to operate in your own country.
2. Where are you "doing business". Even if you are a global enterprise, you could be doing business in the US, in which case you are probably better off having your company in the US. This is a complex tax question that I can't answer here, but if you have an office or employees in the US you are doing business in the US for example.
3. Where are your employees - if you have employees in another country then you might have some advantages setting up a business in that country.

I looked at various options in terms of taxation (the laws regarding the others are much of a muchness in any Western country), but I just went with my own country (England) since I have better access to lawyers and accountants locally to meet my needs. Ultimately, if you want to change country later on, it isn't that hard (unless you have employees). So I would suggest waiting until you come up against a specific issue before thinking about this and just startup where you are.

Estonia if you don't care about the image. Country is part of europe and tax is really business friendly.

Delaware if you care.