Rule of thumb, ALWAYS host your website in the country of your target audience. There’s this thing in the big bad world of SEO called “localised search query”. I won’t go into too much detail; instead I will show you what it means in this image.
Notice I clicked “pages from the UK”? Google will intelligently remove all websites that don’t have an IP address registered in the UK while conducting this search. They do look and IP addresses and give you weighting by the location of your IP address. A good little tool to check where your site is hosted is at Domain Tools. Just enter your website URL or the IP address if you know it and it will tell you where your host is located.
If you need help with finding hosting providers in the country you desire, you can always go to a few forums for web hosting. Web Hosting Talk is one of the best forums on this topic and is very active. Another good resource is HostSearch.
Now this may all change going further as search engines continue to innovate. Google may eventually provide you with search results from your own city, neighbourhood, post code or even street. That, probably will not make any difference to where your IP is located. As long as its in the same country, you’re sorted.