With rising tensions in the US and across the globe, now is a good time to review your data locations and data processors policies. Does parking your data overseas create a risk for your business? What are the implications of international data centers and website hosting to your business?

Every business is different, and your needs may be well served by overseas providers, however the UK Gov has recently been issuing guidance on data security, and we have complied a list of key risks when you are offshoring your data. Not all the issues raised may affect you or your business but it is best to do a small audit and check your business data is not at risk of becoming unreachable.

It’s something I have been wary about for years, and why we only host data and provide web hosting in the UK. We also have our own cloud server in the office, and any files saved to any cloud storage providers like gDrive are backups of local files. If the data becomes unreachable, won’t matter we have a local copy.

Here’s some additional thoughts and talking points for you to review and discuss internally… or with me if you want to explore any points raised.

Key Risks of Offshoring Your Data

1. Legal & Data Protection Risks

Jurisdictional Exposure

• Hosting or managing data overseas often places that data under foreign laws your business doesn’t control.

• Example: U.S. laws like the CLOUD Act can compel American-based providers to hand over data even if it’s stored in another country.

Data Sovereignty & Compliance

• UK businesses must comply with UK GDPR (General Data Protection Regulation) and the Data Protection Act 2018 — it is YOUR responsibility to ensure “Personally Identifiable Data” (P.I.D) for data subjects is secure and managed securely. This is not just your customer, but suppliers and any P.I.D. info in your databases even if data is hosted offshore. Failure to have sufficient security and risk mitigation can mean fines up to 4 % of global revenue or €20 m (whichever is higher).

• You remain responsible for data compliance, even if an (overseas) third-party provider mishandles it.

Cross-Border Transfer Complexity

• Transferring personal data outside the UK or EU requires adequate safeguards (e.g., legal agreements, model clauses), and those can be complex and costly to implement correctly. Have you recently uploaded a spreadsheet with PID to cloud storage overseas? Do you have a statement from your data processor on their UK GDPR compliance and data handling security?

Contract & Legal Enforcement Challenges

• Enforcing legal contracts against offshore providers can be difficult, costly, and slow — especially in jurisdictions with different legal systems or weak enforcement.

Mitigation: Start to look at migrating sensitive data from US based cloud storage, hosting and overseas IT infrastructure to UK. What would you do if your data became unreachable?

2. Security & Cyber-Threat Risks

Increased Attack Surface

• Data and systems accessed across international networks may pass through multiple jurisdictions and internet routes, increasing target surface for attackers. What risk mitigation is in place to prevent the data being accessed en-route to and from the data center you are using?

Provider Security Standards Vary

• Offshore teams/providers may not enforce strong security controls (e.g., robust encryption, patching, endpoint protection) — increasing the risk of breaches.

Insider & Human Risks

• Lack of consistent security training and oversight of offshore personnel may lead to accidental exposure or misuse of sensitive systems or data.

Unauthorized Access

• Offshore support staff often need backend access, but you may have limited visibility or control over who can access what, when, or how.

Mitigation: Look at local network attached storage – you can place a multi-disk RAID array on your network. You can then store multiple Terabytes of data, within your complete control, and often at a much lower cost per gb than paying a large data storage provider. Having a data management policy is key. What do you host locally? Are your cloud storage policies robust and well managed?

3. Compliance & Operational Risks

Contractual Breach Exposure

• Many contracts (with customers, vendors, regulators) require data to remain in a defined jurisdiction. Hosting overseas can breach those clauses. If you are going for tenders with public bodies ensure your data policies are clear and unambiguous.

Loss of Government / Regulated Contracts

• Public sector, healthcare, finance, or defence work often mandates UK or approved territory data residency. Offshore hosting may automatically disqualify you from bidding.

Inconsistent Global Standards

• Different countries enforce different data retention, deletion, or privacy standards — leading to inadvertent non-compliance. Do you comply with all the data policies in the territories you are storing the data within?

Mitigation: Review contracts, check data requirements, make changes as required. When was the last time you did this? Plan regular reviews to ensure continuing compliance.

4. Data Sovereignty & Control

Lack of Transparency

• Many UK SMEs don’t even know where their data physically resides; a recent survey found ~67 % uncertain if their data was in the EU and ~73 % worried about US storage implications. Where is your website and email hosting located?

Data Sovereignty vs. Location

• “Data residency” (where it lives) is different from “data sovereignty” (whose laws control it). A server located in the EU or UK owned by a US company still falls under US jurisdiction.

Foreign Government Access

• Some jurisdictions have laws requiring local providers to grant government access to data with little or no judicial oversight.

Mitigation: Visit the website below, enter your domain name and hit return and it will show you exactly where your website is located. https://check-host.net/

Where is your website hosted? (comment below)

5. Technical & Performance Risks

Latency & Slow Performance

• If your website is hosted overseas, there is a “round trip” time delay for users visiting your website. On-shoring your hosting can speed up your website with no other changes.

• Requests from UK users to overseas servers (e.g., Asia, North America) take longer, degrading website speed , which negatively impacts User Experience (UX) and SEO.

Reliability & Availability

• Longer international networks can mean more points of failure, slower recovery from outages, and reduced control over uptime SLAs (Service Level Agreements).

Mitigation: If your website seems slow do a speed test gtmetrix.com – ensure you test using a US based server to check what a round-trip load time might look like to your customer.

What is your load speed? Share your results below for a free review and ideas on how to speed your website load speed up!

6. Business Continuity & Strategic Risks

Vendor Lock-In

• Once critical systems are offshore, switching providers or insourcing becomes expensive and disruptive, especially without well-defined data export features and proprietary data formats.

Political / Geographic Instability

• Some hosting regions may face political or economic instability that disrupts infrastructure, connectivity, or legal protections. How’s your US hosting looking?

Regulatory Changes

• Rules change; e.g., the risk of the UK losing EU data adequacy status could impact data flows between UK and EU businesses.

Mitigation: The worst time to create a disaster recovery plan is after a disaster strikes. Create a disaster recovery plan asap or
review your current one, and set dates for future regular reviews. Doesn’t have to be fancy – could just be a “PEN THIS DOCUMENT IN CASE OF EMERGENCY” and it has your key contacts details – mobile phones, emails etc. Also instructions on how to switch off PCs and servers etc. Does your business have a disaster recovery plan?

7. Strategic & Commercial Risks

Hidden Compliance Costs

• Offshore solutions may appear cheaper, but legal compliance, audits, and risk mitigation raise the real cost substantially. Have you reviewed all your data processors recently? Are their security and data handling policies transparent and easy to understand?

Competitive Advantage Lost

• Your customers increasingly value data privacy and sovereignty. On-shoring your data and UK based website hosting can become a selling point over offshore alternatives.

Reputational Damage

• Data breaches, privacy violations or compliance failures often damage brand trust and customer retention more than the immediate financial penalties.

Mitigation: Ask yourself these questions and be prepared –

• Do you have a risk mitigation policy in place?

• What would the business do if you lost access to cloud storage like gDrive, MS365?

• Do you have a disaster recovery plan ready to go?

• Do you have a very recent backup for your website on your computer that you could transfer to another host if your data is no longer available?

Glossary (Simple Definitions)

• GDPR — General Data Protection Regulation: EU/UK law protecting personal data privacy; applies even when data is handled overseas.

• UK GDPR/Data Protection Act 2018 — UK’s version of GDPR after Brexit.

• CLOUD Act — U.S. law that can compel companies to hand over data, in or out of the U.S.

• Data Sovereignty — Legal control over data based on jurisdiction and governing laws.

• Latency — Delay experienced between a user request and system response (lower is better).

• SLA — Service Level Agreement: contractual performance guarantees between provider and customer.

Summary

While offshoring hosting and IT infrastructure may offer cost savings, it introduces significant legal, compliance, security, and control risks, especially for UK/EU SMEs. Awareness of laws (like GDPR and the CLOUD Act), data sovereignty, performance impacts, and vendor oversight is essential before making hosting decisions.

Some simple questions, and updates to your current data handling and policies improve your risk mitigation. Don’t wait for a problem to escalate.

Always happy to discuss further.