Hosting location would not have a lot impacts on SEO purpose if only the server is stable and fast to access considering page loading time is also a factor for ranking purpose these days.
SonnyCooL (4 May, 2010)
As with almost everything in SEO, there is usually no one thing that causes a URL to rank well. It is usually lots of small optimizations that when taken as a whole causes a URL to rank well.
Having your site hosted in the country where your targeted audience is located (or the US if you are a global company) DOES give you a slight advantage. But not doing so isn't going to kill your rankings. You're just missing out on one more little thing that could help your site.
using other location then your target place is not a big drawback but using a CCTLD that is different from your target country would deal you bigger damage in search engine ranking.
so go for either a universal TLD (3-letters) or the CCTLD for your targeted country and if possible then try to find hosting in the target place as well.
I believe that "where" the inbound links are "located" and the tld are more important.The location of the host server may not even be in the control of the webmaster. The US, Hong Kong and Singapore are popular locations for hosting. For example, in the US market a Los Angeles attorney could have their hosting in New York. I don't believe that it would help to have the website hosted in Los Angeles.
SonnyCooL (26 May, 2010)
server location and tld domain plays a key role in seo but it can overcome by linkbuilding if you do it in the right way
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It shouldn't be a major problem but it can help in some cases.
Hosting location is not a major issue. But country level domain is very important. For example, if you target UK , you should get a domain name co.uk to get getter ranking for UK.