"It's as simple as asking the question," Rachwald says.

Although he warns that ensuring your service provider is contractually obliged not to transfer the data to any other countries without prior consultation and agreement can be more of a challenge. Many cloud service providers have one-size-fits all contracts and service level agreements that they are not willing to vary.

Some cloud service providers do try to make it easier for their customers to comply with data protection legislation.

"When we expand from the United States into Europe, we will have a data centre within the EU," says Eric Webster, VP of sales with cloud business continuity and disaster recovery specialist Doyenz.

"We have a worldwide agreement with Internap and will be using their co-location data centre in London," he says, so the data of European customers of Doyenz will never leave the EU. The behemoth that is Amazon Web Services also has regional data centres across the world, that service only certain geographies: the EU Region, for example, uses servers that are physically located in Ireland.