No, Mr (? almost certainly) AC, that's not the issue. It's more (if you RTFS, which you probably didn't) like "If you don't have an employee contactable in this country, with some responsibility for what happens on your site in this country, you can't operate in this country."
Which is actually quite a reasonable thing to require of a global corporation. A small operation - say an internet cafe which operates a number of mailing lists for local issues - is a very different thing.
They don't even require that there be some person in the country - just that the company have an address in the country. Which you can get in any capital city in the world for a lot less than an employee costs.
Consider another SM issue on Slashdot at the moment - the lawsuit between Mark Zuckerberg (middle-aged lawyer of a town on the same planet as Nepal) and Mar Zuckerberg (CEO of a SM company) ; if Mr Zuckerberg didn't have a legal "point of presence" in his country, it would be considerably harder for Mr Zuckerberg to sue Mr Zuckerberg for things Mr Zuckerberg's employees did causing costs and difficulties for Mr Zuckerberg.
There are currently about 200 "countries" on the planet (including a few entities like the Vatican City and Monaco which are probably subsumed into Italy - maybe France, for Monaco), and having to maintain a mailing address in each of, say, the smallest 25% of them would cost something like 2 or 3 employees, world wide. You'd probably need more employees to handle advertising SALES in those countries.