[gpjt]

Not from Lago, but from my own experience I'd guess it's due to the requirements to set up payroll in different countries. If you hire someone, even as a remote worker, in a particular country, you need a payroll processor to make sure the employee is paid with the correct tax deductions, pay those taxes to the local government, and so on. You also need to make sure that you comply with local labour laws. Doing all of that is far from trivial, so there's a high cost to taking on your first employee in any given country.

Intuitively you might think that the EU, with all of the freedom of movement laws, might make this unnecessary, but it doesn't. At least as far as I know, it's no easier for (say) a German company to hire someone in Italy that is is for them to hire someone in Japan.

[gpjt]

Also worth noting that while there are "Employer of Record" and "Professional Employer Organisation" businesses who essentially have branches with payroll etc all set up in a bunch of countries, and can hire people there and act as the nominal employer while the employee actually works for another company, but at least the last time I looked they were very expensive -- at around thousands of $/€/£ per employee per month.

[mib32]

I was working for a company in France, while based in Latvia, and we worked according to B2B contract and I was just invoicing them and paid all my taxes. No problem.

[gpjt]

True, that can be a useful solution. But you have to be careful; when I was running a UK-based company we had to get lawyers to carefully draft the contract so that it fulfilled the requirements to be truly B2B and not be something that would be deemed employment. I would expect the rules around that kind of thing to be even tougher in France, if anything.