Data residency refers to the physical location of the servers that store your data. A US company can offer “EU data residency,” meaning your files sit on servers in Germany or France. But if that company is US-owned, US laws like the The CLOUD Act is a US law. It lets US authorities request data from US companies, even when the data sits on servers in Europe. Learn more → can still apply. This is why data residency alone does not guarantee Data sovereignty means your data follows the laws of the country where it is stored, and stays under that country's legal control. Learn more → . Server location is one part of the picture. Legal ownership is the other.
Frequently asked questions
What is data residency?
Data residency means the physical location of the servers that store your data. If your files sit on a server in Germany, that server location is your data residency.
Data residency says nothing about which company controls the data, or which country's laws apply. It only describes where the data physically sits.
Does data residency alone guarantee privacy?
No. Data residency only tells you where your data sits, not who can access it. A server in the EU does not automatically mean EU privacy protections apply.
If a US-owned company runs that server, US law can still reach the data. Laws like the CLOUD Act let US authorities request data from US companies, wherever the data is stored.
What's the difference between data residency and data sovereignty?
Data residency is about location: where the servers physically are. Data sovereignty is about legal control: which country's laws actually apply to the data.
A company can offer strong data residency, with servers only in Europe, while still lacking data sovereignty if a non-European parent company controls it. The two ideas often get confused, but they answer different questions.
Can a US company legally offer "EU data residency"?
Yes. A US company can rent or build servers in the EU and store your data there. This is a common practice, and it is legal.
But offering EU data residency does not remove the company from US jurisdiction. If the company is based in the US, or controlled by a US parent, US law can still require it to hand over that data.