A virtual private server (VPS) is a virtual machine (something like a computer divided into many smaller machines using special software). They are often used by Internet hosting providers. Multiple VPS's run on the same machine, but they are separated as they will only share hardware resources without interfering on software level. A VPS is dedicated to the customer's needs, has the privacy of a separate physical computer, and can run server software. There are many platforms that can run a VPS. Some of them are VMWare and Xen.
Similarly, in the case of VPS, there are several users that are using the same server but they are isolated from each other. It means that no one will be affected by how much resources another is using. You will get the speed and security that you need without compromise. It is almost a perfect scenario because you will get the benefits of a private server with shared cost of services.
Think of a shared server as a large apartment complex, and all of the individual apartments are rented by other website owners. All of you need a place to live — just like your website’s files — but going out to buy a huge family home would be too expensive for your needs. Sharing common areas and utilities in an apartment block helps keep costs down. And the same is true for shared hosting.
And if your “neighbor” on the server is hacked, there’s little chance the infection will spread to your VPS because the hypervisors that are used to create separate VPS environments deliver multi-layered network security and keep tight controls on what enters and leaves. Your root access also means you can add or customize your VPS security software as you please.
Thus, you could use servers from other countries as well without facing any difficulties or additional duties from the governments of either country.