For best search results, you should have a server that resides in the same country as your target audience. This will ensure that search engines list your site more prominently in local search engines, such as google.de or google.co.uk.
Having a server based in a different geographical position may mean that your site isn't ranked in the correct local directory, especially if you site has an international domain name (e.g. .com, .net, etc...)
What impact does server location have on rankings? - Matt Cutts on Youtube Better Google.co.uk Search Engine Rankings (applies to other countries)