Location of your server is a part of the equation and it is not the most important part. I have successfully been in the top 5 in the US for Custom Programming even though at the time my server was based in Denmark, I have just relocated that site to Amazon in the US last week, I will let you know if that has any effect on the rankings.
Other important factors are page load, bounce rate, content, domain age and the length of the domain registration and obviously incoming links.