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Tax and employment law.

Some countries insist on there being a physical presence of the company if they wish to employ staff.

Could also be for IP reasons. There are legal technicalities that I don't pretend to understand: One contract I worked on required the work to be performed in a specific Canton in Switzerland. Once the work laptops had IP on them, the machines were not allowed out of that Canton. Had something to do with international IP law that was never clear to me.

Switzerland is a decentralized federal state where cantons get a great deal of autonomy, eg Zug (near Zurich) is famous for having low taxes and being very friendly to crypto companies.

Many US companies are also unwilling to let remote staff operate in states where they don't have operations, because they're concerned about creating a "nexus" there and becoming liable for state sales taxes etc.

There are also regulations/laws for certain industries regarding data as well.

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