# What is Data Residency?

It is the obligation to keep data within the borders of a certain geographical region or country for legal reasons.

## Overview
It becomes a legal issue in which country or server the digital data is physically stored. Some states may prohibit or restrict their citizens' data from traveling beyond their borders.

*Analogy: It is like a country requiring that confidential documents belonging to its citizens be kept only in safes on that country's territory.*

## How it works
Companies ensure this legal compliance by locating their servers within the borders of those countries, depending on the region they serve.

## Where it is used
It is mandatory in industries that process sensitive data, such as banking, healthcare and government services.

## Commonly confused with
It may be confused with data security, but this situation goes beyond security and is directly related to the physical location of the data.

## Frequently asked questions
**Why is it important?**
It is important to facilitate legal audits and protect national data security.

**Does it affect cloud systems?**
Yes, cloud providers now offer the ability to choose where data resides.


## Related terms
- [GDPR](/en/dictionary/gdpr/)
- [Self-hosting](/en/dictionary/self-hosting/)
- [Local-first](/en/dictionary/local-first/)

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Source: TreScout Dictionary · https://trescout.com/en/dictionary/data-residency/