What is data residency?

Data residency refers to regulations and policies that govern the physical location and jurisdiction in which personal data can be stored and processed. These regulations often stipulate that data must be stored within specific regions or countries to ensure compliance with local data protection laws and standards.

Key aspects:

1. Geographical Restrictions: Certain regulations require that personal data be stored and processed within specific geographic boundaries to ensure data sovereignty and enhance security.
2. Cross-Border Data Transfers: Some regulations restrict or impose conditions on the transfer of personal data across borders, requiring organizations to implement safeguards or obtain explicit consent.
3. Data Localization: Organizations may be mandated to localize data storage, meaning they must establish data centers or use cloud services within the regulated jurisdiction.
4. Compliance with Local Laws: Data residency requirements are often aligned with local data protection laws, such as the GDPR in Europe, which mandate strict controls over how and where data is handled.

Data residency requirements by country:

Data residency requirements vary significantly by country. Here’s a non-exhaustive list of some prominent examples:

• European Union (EU): The General Data Protection Regulation (GDPR) restricts the transfer of personal data outside the EU unless adequate safeguards are in place.
• China: The Data Security Law restricts the transfer of personal data outside China without prior approval from relevant authorities.
• Brazil: The Lei Geral de Proteção de Dados (LGPD) establishes data localization requirements for certain types of personal data.
• California (US): The California Consumer Privacy Act (CCPA) does not explicitly mandate data residency, but some interpretations suggest limitations on data storage outside the state for specific compliance purposes.

Implications for organizations:

• Infrastructure Decisions: Organizations must consider data residency regulations when choosing data storage solutions, potentially requiring investment in local data centers or compliant cloud services.
• Legal and Compliance Costs: Ensuring compliance with data residency regulations can involve significant legal and administrative costs, including audits, impact assessments, and contractual agreements with third-party processors.
• Risk Management: Non-compliance with data residency regulations can lead to penalties, legal action, and reputational damage, making it crucial for organizations to manage these risks effectively.

These regulations and requirements are designed to protect personal data by ensuring it is subject to the legal and security frameworks of the jurisdiction where it is stored, thus promoting trust and compliance .

Check out this webinar on how FormAssembly uses AWS to meet data residency requirements.