Your fear is not unfounded. I am very familiar with the legal/court system in a south american country and I can pretty much assure you that any attempts to sue / enforce the terms of your contract to someone who is willing to break the law would be expensive and futile. That said, I personally know many top notch developers working remotely for US companies that would never dare to put their reletionships/reputation at risk by being careless/malicious with code. It is just to good a gig to risk.

* I guess if your code was sooo valuable someone could be tempted into cheating it could happen.. but if that is the case, a US developer would behave no different.

It did come across as xenophobic, and as a remote developer I found it a bit insulting, although I understand where you come from.

Yes, you have to weigh the risks and rewards, and if having your app source code disseminated would break you, then I'd want a high degree of control too. I have been given quite a lot of trust in my remote jobs and I haven't breached it, but I believe the companies involved would have been able to sue (so they weren't as helpless as an individual coder), and even if I had turned out to be morally corrupt, it wasn't something where stealing it would have given me much of a material advantage anyways (enterprise code is very much tailored to fit).