Muslims are encouraged by Islam to have good relations with all people unless they show open enmity. There is no obligation upon Muslims to live in a Muslim country—that is, a country where Muslims are the majority—for all Muslims have the right to live where they want as long as their beliefs are secured, and they are free to practice their faith. Note that a Muslim country is not necessarily an Islamic one, for an Islamic country is one that is governed by the Shari`ah or the Islamic Law.
Dr. Sano Koutoub Moustapha, Professor of Jurisprudence and Its Principles at the International Islamic University, Malaysia, states the following: “There is no obligation upon a Muslim to live in a Muslim country at all. As a Muslim, you have the right to live wherever you wish as long as you can perform your Islamic duties. Furthermore, Muslims are required to live in non-Muslim countries for the sake of da`wah (calling others to Islam) and positive interaction with others.
Islam stands for openness and cooperation with all nations and peoples, especially the nations that are not fighting Muslims. Allah has called upon Muslims to travel as much as they can in order for them to see and know about His signs and creatures. Referring to this, Allah says: “Do but travel in the land and see the nature of the consequence for those who did deny (the messengers)” (Aal `Imran:137).
Based on the above, I see that there is no prohibition for a Muslim to live in a non-Muslim country, but it is strongly recommended to mix and communicate with the non-Muslims there [without losing one’s Muslim faith and identity].”