Why remote work is still anchored in local systems

In 2021, every founder with a laptop and a Stripe account could spin up a global team overnight. Remote work was pitched as the great equalizer: hire the best, wherever they are. Expand into new markets without ever opening an office. Swap capex for SaaS and physical headquarters for cloud storage.

But three years later, the cracks in that dream are visible—even in the most well-funded companies. Performance is plateauing. Coordination costs are rising. And legal risk is catching up faster than most startup CFOs can say “permanent establishment.” This isn’t just a growing pain. It’s a recalibration. The future of remote work is still, stubbornly, local. Because while labor might be digital, regulation isn’t. Culture isn’t. And execution certainly isn’t.

Much of the early hype around remote work was built on abstractions. Geography was a constraint to be overcome. Cost arbitrage was strategy. Tools like Zoom, Notion, and Deel made it feel like borders were optional and incorporation was a formality.

But even then, there were signs that the math didn’t hold. Running a high-performing team is not just about access—it’s about alignment. And alignment, as it turns out, is profoundly local. How decisions get made. How accountability is enforced. How urgency is interpreted. All these things are shaped by culture, habit, and proximity.

What many founders misunderstood is that remote doesn’t automatically equal scalable. Yes, you can hire a full-stack engineer in Ho Chi Minh City or a designer in Nairobi. But integrating them into a decision loop that spans San Francisco, Berlin, and Dubai? That’s not a Slack problem. That’s an ops architecture problem.

The more sobering reality is this: labor law never bought into the remote-first story. In almost every jurisdiction, employment remains a local matter. Contracts must comply with national laws. Benefits must align with local standards. Data residency rules differ by region. And tax exposure doesn’t vanish just because the office does.

Some startups outsourced the risk to Employers of Record (EORs), who promise fast hiring without legal entity setup. But even that model is fraying. EORs handle payroll—but not performance. They shield liability—but not cultural friction. And in higher-risk markets, they’re increasingly under regulatory scrutiny.

In Singapore and the UAE, regulators are taking a closer look at the rise of “shadow employees”—workers effectively functioning as full-time staff without proper local contracts. In the EU, stricter classification rules are making it harder for companies to pretend contractors aren’t employees. Even in the US, state-level tax residency enforcement is becoming aggressive. Remote workers in New York or California who shifted temporarily to Florida or Texas during the pandemic are now dealing with unexpected audits and back taxes.

In short: remote work doesn’t erase risk. It relocates it. And often, it compounds it.

Then there’s the soft side of the equation—culture, cohesion, and trust. Many remote-native companies leaned into documentation and async processes. They open-sourced their employee handbooks. They ran onboarding through Notion wikis. They hosted virtual offsites and Friday Zoom games. But for many teams, something vital never clicked.

The subtle rituals that bond people—the shared lunch breaks, hallway conversations, after-hours banter—couldn’t be replicated digitally. And without those rituals, new hires struggled to internalize expectations, navigate ambiguity, or build trust fast enough to move at startup speed.

This wasn’t just about loneliness. It was about alignment erosion. In hybrid teams, especially those with regional clusters, communication quickly fractured along time zone and cultural lines. The “core team” often sat in the same city—Singapore, Berlin, or New York—while remote contributors gradually became peripheral, even if nominally equal.

In Asia, this led to teams in Jakarta or Manila being treated as execution units rather than decision-makers. In Europe, developers in Eastern European markets found themselves excluded from product strategy discussions, even if their output powered the roadmap. The result? Burnout, churn, and—most dangerous of all—delayed decisions that cost velocity.

As remote hiring scaled, it also exposed gaps in foundational strategy. Startups that chased talent in every market suddenly had to manage sick leave laws in four jurisdictions, parental leave norms in three, and employee termination timelines in at least five.

Growth-stage firms expanding into the GCC ran into unexpected barriers around Saudization, work visa quotas, and mandatory in-country presence to win government contracts. Companies hiring in India faced rising scrutiny on IP ownership when contracts weren’t compliant with local employment law. And the deeper the compliance stack grew, the less scalable the model became.

Suddenly, the company that had 20 remote workers across 10 countries needed local counsel in every region. That’s not a growth hack. That’s a cost center. For some founders, the fix was retreat: they began consolidating hiring around regional hubs. Others doubled down on legal infrastructure, setting up entities in key markets and hiring in-house compliance staff. Either way, the fantasy of frictionless remote expansion was replaced by the reality of distributed complexity.

Interestingly, some of the most effective players in the “remote” world are the ones that never fully left local strategy behind. GitLab, long celebrated as a remote-first pioneer, runs on one of the most detailed documentation cultures in the tech world. But even they have regional hubs and travel budgets for in-person collaboration.

Atlassian introduced “Team Anywhere,” but emphasized time zone cohesion and face-to-face offsites. Airbnb offers location flexibility, but draws a hard line around compliance with tax and residency requirements.

In Southeast Asia, Grab and Gojek allow hybrid work—but keep decision-making tightly anchored in HQ cities like Jakarta and Singapore. They’ve learned the hard way that regional growth still runs on local relationships, cultural literacy, and in-person negotiation. Even Deel—the platform powering remote hiring itself—has a growing network of local legal partnerships and entity infrastructure, quietly acknowledging that abstraction only gets you so far. This isn’t a retreat. It’s a return to strategic clarity.

So what does a sustainable remote work strategy look like now? It starts with rejecting binary thinking. The question isn’t “remote or not?” It’s: “Which roles require shared time zones, legal infrastructure, or cultural context—and which don’t?”

Companies are moving toward a hybrid model—not just in terms of office days, but in terms of strategic architecture. Local hubs for leadership, compliance, and customer-facing teams. Remote flexibility for roles that can truly operate asynchronously. A conscious layer of investment in documentation, onboarding, and performance systems that prevent misalignment before it compounds.

This is not about giving up on global talent. It’s about designing systems that don’t collapse under the weight of complexity.

Early-stage founders face a different tradeoff. Hiring remotely can unlock incredible leverage—access to better talent at lower cost. But without clear structure, it can also drain energy fast. The temptation is to move fast and figure out HR later. But that approach carries real risk.

A poorly scoped contractor in India who builds your MVP but retains IP ownership could cost you a term sheet. A designer in Brazil working full-time without local protections could trigger a legal investigation. A culture mismatch between regional teams could delay product timelines by quarters—not weeks. What looks like efficiency on the surface often hides alignment debt underneath. The smarter move? Be surgical about where you go remote. Invest early in documentation. Get real about compliance risk. And when in doubt, over-communicate.

The phrase “remote work” needs to evolve. It’s not a strategy. It’s not a philosophy. It’s an operating mode. And like any operating mode, it needs design, structure, and iteration. What worked in the pandemic era—when everyone was home and urgency trumped process—won’t scale in an environment shaped by regulatory crackdowns, cross-border tax enforcement, and cultural friction.

The future of work isn’t about being everywhere. It’s about choosing where presence matters—legally, strategically, and emotionally—and building around that. So let’s retire the myth of the borderless workforce. The best teams in the world are still deeply local—just smarter about how they stretch across time and space.

Because in the end, talent may be global. But execution is still personal. And proximity, when used with intention, remains one of the most underrated performance levers in business.