Data residency answers the question, Where is my data stored?

When an organization signs up for Microsoft 365, they indicate where their primary place of business is. This decision maps their tenant to a region, which in turn is used to define which data centers will be used to store their data. Organizations using sovereign clouds (such as 21ViaNet or Government Community Cloud) have very explicitly designated storage regions. For security purposes, Microsoft does not disclose the exact address of its data centers. Customers can leverage public documents, however, to learn where in the Microsoft cloud their data is stored, depending on which type of service they are using.

You can learn more about where data is located by visiting https://products.office.com/en-us/where-is-your-data-located.