Taxes, labor laws, and liability management.

This is usually due to taxation and legal reasons. In the US for example, even a US based company out of, say, New York has to have paperwork set up with each state they want to hire in. So if this hypothetical company wanted to hire their first employee in, say, Texas, they’d have to do some kind of legal stuff with the state authorities in Texas to legally hire someone remotely there. Once that’s done they can hire more without much if any additional paperwork with the state, but that initial setup has to be done so they could pay employment taxes to the state. This goes for every state the company hires an employee in, based on where the employee does their work from. So if they later hired their first employee out of say California, more paperwork specifically for California.

Going internationally, particularly in today’s geopolitical climate, gets even more complicated.

It generally boils down to law, taxes, government issues when you get down to it.

In the case of India the time zone difference is killer.