The only issue could be latency or packet loss due to the transAtlantic through your ISP provider. But that could be so minimal that the cost savings far outweigh any disadvantages. Depends on what you're doing too. If it is a gaming server, then you really want it to be closer to your players. Hope this helps.
Well, one of the main problems is the distance, which may affect the speed, depending on what you plan to do with the server. A local server may be able to offer better download speeds and even access times to your customers, so if that is very important, then it's better to go local.
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Depends what and where your "Target Audience" is really.
If your aiming your services at the local people, or people within the same country, it would be best to get a server based in that country as speeds will be better for them.
Although with the hosting of websites i find that the location of the server is not extremely important. E.g. im from the UK, and i can only see a minor difference in browsing speed with a UK server compared to a server based in the USA. Download speeds do seem to be faster and more stable for me if the server is UK based compared to a USA based server, but there is not a huge difference.
With other services such as game servers, voip servers etc... it would be better to have a server in the same location as your target audience because of ping and response times.
A disadvantage would be that you don't have physical access to the machine, but you dont need it. Be adviced to buy server from company that would be ready to change any part of the mashine for a couple of hours if there is a failiure.