What is Data Sovereignty? Explained

The way organizations collect, process, and store data has changed dramatically in recent years. With cloud computing becoming the norm, businesses no longer keep all their information within their own premises or even within their own country. This shift has made one concept more important than ever: data sovereignty.

Data sovereignty refers to the idea that data is subject to the laws of the country in which it is stored. For organizations that handle personal data, this means understanding and complying with the data protection laws of the country where their cloud service or database is located. As data generated by businesses grows in volume and complexity, the importance of ensuring that personal information is managed in accordance with these laws cannot be overstated.

Tools like Baserow make it easier to design and manage structured data systems that respect sovereignty requirements. Because it’s open-source and highly flexible, teams can customize how they process and store data while maintaining visibility and control.

Understanding Data Sovereignty

At its core, data sovereignty is about legal jurisdiction. When organizations collect personal information, that data is not just a collection of numbers and files—it is subject to the laws of the place where it resides.

For example, if a company in the United States processes and stores customer data on servers in Germany, that data is subject to the laws of the European Union (EU). These laws include robust protecting laws such as the General Data Protection Regulation (GDPR). This means that the company must follow EU data protection requirements, regardless of its headquarters.

This has major implications for how businesses handle everything from customer databases to employee records. Data sovereignty laws are designed to protect citizens’ rights, giving them assurances that their personal data will be treated with transparency and security.

Data Sovereignty vs. Data Residency

The terms data sovereignty and data residency are often used interchangeably, but they refer to different concepts.

• Data residency describes the physical location of where data is stored. For example, storing personal data in a Canadian data center means its residency is in Canada.
• Data sovereignty, on the other hand, refers to the jurisdiction and data protection laws that govern that data. Even if data is physically stored in one location, sovereignty dictates which legal system applies.

This distinction becomes especially important in a cloud computing environment. Consider an organization using a cloud service provider with data centers distributed across multiple countries. Many companies rely on cloud storage solutions, but if providers replicate data across borders, sovereignty laws may unexpectedly come into play. While the company may believe its data is stored locally, cloud service providers sometimes transfer or replicate data across borders to optimize performance. This can mean the data is suddenly subject to the laws of another jurisdiction.

By clarifying the difference between residency and sovereignty, organizations can better plan their compliance strategies, especially when transferring data across borders.

Why Data Sovereignty Matters Today

In today’s interconnected world, the flow of information rarely respects national boundaries. Cloud computing has transformed how businesses process and store data, enabling global collaboration and real-time access. But this convenience comes with risks.

When organizations move data—including sensitive personal information—across borders, they expose themselves to new legal, security, and compliance challenges. For example, storing data in a country without strong protecting laws may leave customers vulnerable if government agencies demand access.

The General Data Protection Regulation (GDPR) in the EU set a global benchmark for data protection. It requires organizations to maintain strict safeguards for personal data, no matter where that data is transferred. This has made companies worldwide more aware of sovereignty concerns. Similar frameworks are emerging in other regions, further complicating the compliance landscape.

Another reason sovereignty matters is the rapid growth of cyber threats. Data security isn’t just about preventing hackers—it’s also about ensuring governments or third parties can’t gain unauthorized access. Organizations need to guarantee that personal data remains secure and also protect sensitive data against unauthorized access by governments, hackers, or third parties.

To manage these challenges, many organizations adopt a clear approach to data sovereignty, ensuring that compliance is considered at every stage of data collection, storage, and transfer. Having structured systems in place helps reduce the risks of violating data protection laws. Platforms like Baserow allow organizations to build transparent and flexible data workflows, giving them greater confidence in how they manage compliance.

Key Challenges with Data Sovereignty

While the concept of data sovereignty may sound straightforward, putting it into practice is complex. Organizations today operate in multiple jurisdictions, each with its own rules, creating overlapping obligations. Some of the key challenges include:

1. Managing multi-jurisdictional data flow: Modern businesses often collect data generated in one country, process and store it in another, and then analyze it elsewhere. This global flow of information makes it difficult to identify which data protection laws apply at any given point.
2. Working with cloud service providers: Most organizations rely on third-party providers for storage and processing. Cloud computing services often distribute data across several regions to ensure redundancy and performance. However, this makes it harder for businesses to guarantee that data is only handled under the sovereignty laws they intended.
3. Ensuring compliance with the GDPR and other regulations: The general data protection regulation (GDPR) is widely seen as the gold standard, but it is not the only data protection regulation GDPR-based framework companies must consider. Nations such as Brazil, India, and Australia have introduced their own protecting laws. Staying compliant with all these frameworks simultaneously is an ongoing challenge. Beyond compliance, sovereignty issues also affect intellectual property, as businesses must ensure that proprietary information isn’t exposed in jurisdictions with weaker protections.
4. Balancing efficiency with compliance: Many organizations face pressure to move quickly and scale globally. Yet sovereignty obligations can slow down innovation, especially when transferring data across borders. Businesses must strike a balance between operational efficiency and legal compliance.

Building an Approach to Data Sovereignty

To manage these complexities, businesses need a proactive approach to data sovereignty. Rather than treating it as a compliance checkbox, organizations should integrate sovereignty into their core data strategy. Key steps include:

• Establishing a data sovereignty strategy: A strategy should define how personal data is collected, stored, and transferred. This involves mapping out where data including sensitive records resides and identifying which data protection laws apply.
• Implementing strong data governance frameworks: Effective governance ensures accountability across teams. It defines who can access, modify, or transfer data, minimizing the risk of unauthorized usage.
• Investing in flexible tools: Organizations need platforms that allow them to control where and how they process and store data. For instance, Baserow provides a customizable environment for data management, giving teams the ability to structure workflows in a way that respects sovereignty requirements without sacrificing productivity.
• Regular compliance reviews: Since sovereignty laws evolve quickly, businesses must schedule regular audits to ensure ongoing compliance.

By adopting this approach to data sovereignty, companies can mitigate legal risks while building customer trust. For a deeper look at how organizations can apply these principles in practice, explore our guide on **data sovereignty for businesses.**

Data Sovereignty Laws Around the World

Different countries are developing their own sovereignty frameworks, which makes the global landscape more fragmented:

• European Union (EU): The EU has one of the most comprehensive data sovereignty laws through the general data protection regulation. It governs not only EU-based businesses but also any organization processing EU citizens’ personal data. Complementing GDPR, the **EU Cybersecurity Act** also strengthens trust in digital services by setting certification frameworks for cloud providers and IT infrastructure.
• United States: The U.S. does not have a single overarching law. Instead, states like California have introduced sectoral frameworks, such as the California Consumer Privacy Act (CCPA), which adds complexity for organizations operating nationally.
• Asia-Pacific: Countries like China and Australia enforce strict data sovereignty laws, requiring that data generated domestically be stored and processed locally. These laws place additional restrictions on transferring data outside national borders.

This fragmented landscape means businesses must pay close attention to where their data resides, how it flows, and which legal frameworks govern it. Each country enforces different laws and regulations governing data protection, creating a complex environment for international organizations to navigate.

How to Stay Compliant

Compliance with sovereignty obligations is an ongoing process. Businesses can take practical steps to reduce risks:

1. Conduct regular audits: Review where data is stored and whether it aligns with relevant sovereignty laws.
2. Choose the right cloud service providers: Not all cloud services offer the same level of transparency. Partnering with providers that disclose how and where they process and store data is essential. Companies using a public cloud must carefully evaluate whether the provider offers enough transparency to meet sovereignty obligations.
3. Ensure transparency in data flow: Businesses should document and disclose how data—including sensitive customer or employee records—is used and transferred.
4. Educate employees: Compliance is not only a technical issue. Teams must understand the implications of sovereignty and how their actions can affect compliance.
5. Leverage flexible data platforms: Tools like Baserow give organizations visibility and control over their data, helping them remain compliant without adding complexity. You can also explore Baserow’s dedicated **security and compliance features** to see how it meets strict governance and data protection needs.

Conclusion

Data sovereignty is no longer a niche concern—it is a central part of doing business in the digital age. At its core, sovereignty means ensuring that personal data is governed by the appropriate laws, no matter where it resides. With the rise of cloud computing and international data flow, organizations must stay proactive in their compliance efforts.

By building a clear strategy, staying informed about data protection laws, and using flexible data management tools, businesses can navigate sovereignty requirements while continuing to innovate. At its core, data sovereignty requires organizations to respect the legal frameworks that govern where and how personal data is managed.

If your organization is looking for a practical way to manage structured data while respecting sovereignty requirements, explore Baserow. Its flexibility helps you adapt workflows to different legal contexts without losing efficiency.

Start building compliant, transparent data systems today—sign up for Baserow.