As far as Islamic Shari`ah is concerned, there is not a one-and-only ruling on living in non-Muslim countries for all Muslims. If a Muslim can practice his or her faith freely and there is no fear for his or her family to be tempted, then there is nothing wrong in doing so.
The prominent Muslim scholar Sheikh Muhammad Iqbal Nadvi, director and imam of Al-Falah Islamic Center, Oakville, Ontario, Canada, states: Scholars look into this issue from various perspectives and the bottom line is the ability to practice Islam and make da`wah (Arabic for: inviting others to Islam). If Muslims are free to practice their own faith and even invite others to join the same faith, then their presence in such countries is needed and sometimes mandatory.
The second perspective is when Muslims are free to practice Islam but they face some difficulties to make da`wah, then it is permissible to live in those countries. However, if one fears that his or her children will suffer religious-wise, then their presence in such countries is useless and they need to search for a better environment.
So, there is no one ruling for all Muslims living in non-Muslim countries. The ideal situation is when a Muslim practices his or her own faith and at the same time lives as a good citizen in his or her own country, sharing the beautiful teachings of Islam with other people. Almighty Allah says: [O My servants who believe! Truly, spacious is My Earth: therefore, serve you Me, (and Me alone)] (Al-`Ankabut 29:56).
So, all the earth belongs to Allah, so we should worship Allah wherever we are.