There are probably also legal risks. The company does not want to hire lawyers to figure out the contract and copyright laws in a foreign country. But, it also does not want to find out that he retained some right to the code he has written and may have some valid claims to it after being let go etc.

This can also hurt due diligence when selling out or having the next investment round. For example, I was once working remotely in a US startup from Poland and they promised me stock options, but later rescinded it, citing the lawyers as the reason (I got a raise instead).