This refers to which company that hosts your website is located in. in the present day, you could have your website hosted in virtually any country. When the internet was first getting started it was widely seen as common sense to have a website hosted in the USA. The opinion now is to have your website hosted in the country that would hold the majority of your potential customers.
The main benefit of having your website hosted in an international country is that if your services cater to a certain audience, then it would be wise to have it hosted in that particular area. The reason for this is that these people would have a superior web experience free of delays.
Expanding companies can also see a benefit with international hosting because if they are looking to expand to a different country, they would gain from local support and resources.
There are many different legal issues to consider when deciding what country to become your host. The reason for this is it may have a big effect on many areas of your business, such as the website or server getting banned if infringements are made.