Server Location No Longer An SEO Factor
In the past I used to preach to clients whose websites are to be optimized international SEO that server locations should be placed where target audience is located. One client whose main target market is China thought about it, but eventually maintained server in Hong Kong since it was widely believed that web servers in China are poorly maintained and subject to frequent disruptions and censorship laws.
Well, it was apparently a myth all along or Google chose to turn off the knob. Dealing directly with a familiar Googler John Mueller, he has this to say:
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.
A more straightforward approach is to use the location settings found at Google Webmaster tools.