I was curious if i can use a VPS with small HDD to serve large videos from folder on an remote server. And it appears it is possible thanks to SSHFS or NFS (there can be obstacles if you're using an outdated OpenVZ virtual server).

Following is about NFS, other mentioned method is under link above.

WARNING: plain NFS is insecure unencrypted there is possibly more secure workaround, but the throughput is claimed to be very low, possibly better to use above linked $$HFS which should have similar throughput like original NFS..

NFS installation on the client and on the server:
deb: sudo apt install nfs-common
arch: sudo pacman install nfs-utils
rhel: yum install nfs-common (says: "No package nfs-common available."? try: yum groupinstall "Network file system client" )

If you want some new features in NFS, you may consider more complicated setup described here. We continue here with most simple setup:

just use NFS

mount -t nfs IP_OTHERSERVER:/path/to/folder OTHERSERVER

also, you need to install nfs-server on OTHERSERVER and edit /etc/exports file
Source: http://www.linuxforums.org/forum/servers/202229-how-symlink-directory-other-server-ip.html#post954743

mount: unknown filesystem type 'nfs' - Try to install nfs: sudo apt install nfs-common" (or yum install nfs-common ?)
mount.nfs: No such device - Try "modprobe nfs", if it show error like FATAL: Module nfs not found in directory /lib/modules/..., you may duck.com it or if you are on a VPS (OpenVZ), you can ask physical server admin to run that command to enable nfs kernel module.

there is more detailed tutorial: http://www.tecmint.com/how-to-setup-nfs-server-in-linux/