Here's what Apple actually says about geographic restrictions for family members:
https://www.apple.com/legal/internet-services/itunes/us/terms.html
"All Family members must share the same Home Country."
Share purchases with others in your Family Sharing group
https://support.apple.com/guide/mac-help/share-purchases-with-your-family-mchlc2b37692/mac
"To share purchases, family members must be in the same iTunes Store country or region."
Note that the wording does not actually state they must live in the same country, although technically you are supposed to have your account set to the country where you reside which means in effect members will live in the same country. There aren't any other restrictions as to location and they could even be in different cities.