Some people say it matters, but how much it matters is one variable, and how close the server is to the local business is another.
for example, "they" say it's better to have a server in the same country than on the other side of the planet for local search results. One can see how Google might assume that a server that resolves far away from where the local search is being done might not be as local as one that is in the same country.
I wouldn't worry about UK to Netherlands, however I wouldn't get hosting in Thailand for a local business. No compelling reason to do this, and it does present some risk.
I don't really believe this; I'm just relating what others have said.