For the past several years we have seen many countries creating residency laws, some of which require all government-related data to be stored locally, while others require all consumer data to be stored locally.  European Union countries as well as Russia, China, Brazil and India, are the major proponents of such laws. 

It is not an easy task to satisfy data residency requirements. On one hand, due to cybersecurity concerns, strict residency laws can hinder cloud productivity. Modern IT infrastructure relies on economies of scale, such as a self-driving car may use artificial intelligence software to train itself with a large amount of training data. The more data that is available to the software, the better the software, which makes it easier to contribute more data for training. This process is critical for the success of many cloud applications, from financial transactions to customer relationship management and search engines.

A true hallmark of the internet era has been the free movement of data, leading to concerns as to whether or not residency laws will hinder the development of cloud infrastructure and software. However, if technology is used to secure the data and minimize chances of data getting into the wrong hands, residency laws might actually increase data sharing which would ultimately create new use cases.

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http://www.datacenterknowledge.com/industry-perspectives/cloud-data-centers-need-encrypted-lock-boxes