So many problems. These are just top off my head:
- Countries should want internally organised production, strong companies with own IP, not one-man "companies" producing IP to external entities.
- Those foreign companies will switch to other countries with better prices (Asia, Africa) any time if their programming scene improves. It's not like they have stakes like when building a factory.
- Lot of people think they can invest better, create a better future pension for themselves. This is often true, and why would we want to allow exits, further eroding the whole system? There should be a base pension fund with everyone involved.
> the government loses oversight of actual corporate structures
To the government the company could be a 5 person shell, while it actually employs/pays salaries of 100s of families. Theoretically you could roll up the contracts, but that would be very complicated.