Well, for employees, that's not a B2B relationship. The employer has to make sure they're following the applicable tax and labor laws in each country they have employees in.
I imagine there's also some cultural aspect to it, and keeping everyone in relatively close timezones also has it's benefits.
For eg, I am an Indian frontend dev, living in India and have worked with several US and EU companies. I am happy to be paid say 30 USD per hour, as a contractor, and would manage my own taxes, 401k, healthcare, pensions, etc
give it a try - you can easily save atleast 70k USD to 100k+ USD a year per developer.
Please don't do it. Target US clients for US-grade compensation. Advocate your superior talent, not the dumped price. Most people in low-salary locations are used to low quality of life and they just continue living that life. They don't have to. Aim for better QoL.
I mean, when companies hire remotely worldwide, it is usually B2B contracting relationships. Sometimes intermediary companies are used which specialize setting up entities globally and hiring people as employees of themselves.
I imagine there's also some cultural aspect to it, and keeping everyone in relatively close timezones also has it's benefits.