During the last years, there was a lot of debating related to this question. People keep asking if the server location affects SEO ranking of a website, and if so, how exactly?
Well, the short answer of this question is “NO”. The physical, geographic location of a server doesn’t necessary affect the SEO rankings of the websites hosted. As a matter of fact, Google stopped considering the geographical location of a server as a SEO factor back in 2012. Until then, the location was an important factor, but nowadays Google prefers to set the geo-targeting through Google Webmasters. Here you can find more about google’s recommended Geotargeting settings.
What matters the most is actually the server speed, the website’s TTFB (Time To First Byte), the latency, and of course, the TLD extension. Google knows that people try to find the best deal when it comes to hosting, VPS and dedicated servers, and it’s easier to find a good deal in the international market than on the local / national one.
For example, if you have a website targeting UK visitors, you can easily host it in United States, as long as the speed is good and the website’s domain name is “.co.uk”.
A few years ago, John Mueller, Web Trend Analyst for Google, said this on the google forums:
For search, specifically for geotargeting, the server’s location plays a very small role, in many cases it’s irrelevant. If you use a ccTLD or a gTLD together with Webmaster Tools, then we’ll mainly use the geotargeting from there, regardless of where your server is located. You definitely don’t need to host your website in any specific geographic location — use what works best for you, and give us that information via a ccTLD or Webmaster Tools.