What are the best countries to live in right now? Ask the people who’ve moved abroad: expats. Each year, InterNations, the world’s largest expat community, publishes its Expat Insider report, one of the most comprehensive studies on life overseas. I’ve been covering the Expat Insider report since 2018.
The 2025 edition draws on feedback from more than 10,000 expats representing 172 nationalities, offering a unique window into the best places to live in the world for work, lifestyle and affordability.
This year’s report ranks 46 countries by looking at factors like Quality of Life, Ease of Settling In, Working Abroad, Personal Finance and the Expat Essentials Index (which covers housing, administration, language and digital life). This year’s report ranks 46 countries, down from 53 in 2024, since only destinations with at least 50 survey responses are included.
Panama: The Best Country To Live In
For the second year in a row, Panama has been named the best country to live in, with an impressive 94% of expats reporting that they are happy to live there. “Panama achieves top three results across all indices and top 10 results across almost all subcategories of our survey—which is quite outstanding,” Kathrin Chudoba, editor-in-chief of InterNations, told me in an interview.
Chudoba says it’s difficult to put a finger on what exactly makes Panama so appealing. “Most likely, it is simply the close-to-perfect mix of a decent infrastructure at affordable prices in combination with a pleasant climate and, most importantly, a culture that’s open, friendly and easy to integrate with,” she says.
According to Chudoba, the demographics of the expats surveyed in Panama could also play a role. “We have a high share of retirees (35% versus 11% globally) with a comparatively high gross yearly income,” she says.
More than a third of those retirees say they plan to stay forever. Panama also ranked at the top of International Living’s most recent Annual Global Retirement Index, which highlights the best places to move in 2025.
The Appeal Of Latin America
Panama isn’t the only Latin American country at the top of the list. Colombia makes a big leap this year, climbing from the fifth spot in 2024 to second place overall. Expats there cite strong financial satisfaction (81% are happy with their finances versus 54% globally), affordable housing and a good social life. Still, safety and political stability remain concerns, keeping Colombia out of the top tier for Quality of Life.
Mexico, which ranked number one in 2023 and 2022, comes in number three this year. Known for its friendliness and welcoming culture, Mexico ranks number one in the Ease of Settling In Index. In the report, expats say it’s easy to make local friends, feel at home and enjoy an active social life. Financially, Mexico also fares well, though safety and air quality continue to drag down its overall Quality of Life ranking.
“All three Latin American countries at the top of our ranking this year shine in the Ease of Settling In Index, where they also occupy the top three spots,” says Chudoba. “Expats there appreciate the friendliness of the population, they feel welcome, find it easy to integrate into the local culture and to make friends.”
Asia’s Rising Stars
Half of the top 10 spots go to Asian countries with Thailand coming in at number four, Vietnam (number five), China (six), Indonesia (eight) and Malaysia (10). These destinations stand out when it comes to Personal Finance, all placing in the top 10 for affordability and value for money. Expats also report that housing is both easy to find and inexpensive, a major draw for expats.
China cracking the top 10 is big news. The country ranked number 19 last year. What changed most for expats between 2024 and 2025? “China has actually improved across almost all factors of our survey, but the biggest jump happened in the Working Abroad Index. Placing 30th in 2024, China now entered the top 10 (ninth place),” says Chudoba. “Career prospects have improved in the eyes of expats, job security is higher than a year ago, and even working hours and work-life balance have taken a positive turn.”
The Biggest Winners
Two small Mediterranean countries made some of the most dramatic gains: Cyprus (jumped 22 places to land at number 19) and Malta (which climbed 20 spots to number 26). Both saw improvements in the Working Abroad and Personal Finance indices, reflecting stronger economies, more job opportunities and better work-life balance.
Czechia also had a strong showing, moving up 18 spots to number 21 overall. For the first time, it entered the top 10 of the Quality of Life Index, thanks to better leisure options, safer streets and improvements in digital services. Ireland climbed 17 spots, propelled by career opportunities and new remote-work legislation, despite persistent challenges around housing and healthcare.
Problems In The United States
The United States continues its downward slide, falling one spot to 36th. “On paper, this is only one position below last year’s 35th place,” says Chudoba. “However, considering that there are only 46 countries overall in the ranking this year (versus 53 countries in 2024), it’s actually a significant decline, with the U.S. narrowly missing the bottom 10 in our list.”
Average ratings have dropped across almost all areas covered in the report. “The areas that are dragging the country down are no surprise candidates. As in past years, the U.S. receives particularly bad ratings in three subcategories of the Quality of Life Index,” says Chudoba.
The three areas where the U.S. struggles include Travel & Transit. “Affordability and availability of public transportation and the bad infrastructure for cyclists and pedestrians are the worst offenders,” says Chudoba.
Healthcare is another big issue for expats. Chudoba says expats point to “a lack of affordability, availability and equal access; even the quality is perceived as sub-standard.”
Safety concerns are also paramount among expats, with political stability and personal freedom receiving the worst ratings in years. “The political stability in the U.S. was rated negatively by more than two in five expats (41%) in 2025, with almost one in five (19%) giving it the worst possible rating. In 2024, these shares were at 28% and 9%, respectively,” says Chudoba. “Another factor in this subcategory measures agreement with the statement ‘I can openly express myself and my opinions,’ which has dropped by almost 10 percentage points, from 67% agreement in 2024 to 58% agreement in 2025.”
Expats living in the U.S. also complain about the expensive housing and challenges around social integration. Only a minority say they find it easy to make local friends. “In 2025, almost one in five respondents (19%) disagrees with the statement ‘people in the US are generally friendly towards foreign residents,’” says Chudoba. “In 2024, this share was only at 13%.”
Another repeat offender is the Work & Leisure Subcategory in the Working Abroad Index. “Expats in the U.S. have never been happy with their working hours and work-life balance, and it seems to be getting even worse,” says Chudoba.
Expats also say that the economy is an issue. “The state of the U.S. economy was rated positively by 64% of respondents in 2024; in 2025, the share of positive ratings dropped by almost 10 percentage points to 56%,” says Chudoba.
And that’s not all. Environment & Climate is an issue, too. “In 2024, 27% of expats in the U.S. disagreed with the statement “the government supports policies to protect the environment,’” says Chudoba. “In 2025, this share has grown to 42%.”
Problems In Europe
Europe has issues, as well. A number of European countries are clustered near the bottom of the list, with Italy at number 37, Sweden (number 38), Norway (39), the U.K. (41), Germany (42) and Finland (43). While these nations offer strong infrastructure and quality environments, expats often struggle with bureaucracy, housing, high costs and difficulty settling in socially.
Surprisingly, these are wealthy European countries, but according to Chudoba, that doesn’t make a difference. “The short answer is that wealth alone doesn’t make you happy, especially not if all the money you earn is immediately eaten up by high living costs,” she says. “What most of these countries have in common is indeed that, with the exception of Italy, expats rank them in the bottom 10 when it comes to personal happiness.”
So what is dragging these countries down? “In the U.K., it’s the Personal Finance Index that drags the country down, as well as high housing and medical costs. Expats in the Nordic countries all struggle with settling in. The same goes for Germany, which is additionally burdened by an impossible housing situation, impenetrable bureaucracy, and a bad digital infrastructure. The latter two factors are also particularly sore points in Italy’s ranking, together with a bad performance in the Working Abroad Index,” says Chudoba.
The Biggest Losers
South Korea saw the steepest decline in the report, dropping 21 places to rank 44 out of 46 countries. “South Korea has experienced the most dramatic drop in our rankings this year, and it’s due to a worsened performance across almost all areas of our survey,” says Chudoba. “The only factor for which South Korea has consistently occupied first place for the third year in a row now is access to high-speed internet.”
Expats cited dissatisfaction in a number of areas. “Healthcare—another area where South Korea seemed glued to the top three in recent years—has turned sour, dropping from first place in 2024 to 15th in 2025,” says Chudoba.
Politics are also an issue. “We observed an even more drastic decline in the Safety & Security Subcategory, most notably for political stability (from 18th in 2024 to 40th in 2025),” says Chudoba.
The most drastic change, however, occurred in the Personal Finance Index. “Following a good 15th place in 2024, South Korea finds itself in the bottom 10 a year later, ranking 40th,” says Chudoba.
And at the bottom of the list for the eighth year in a row is Kuwait. Although the strong economy continues to draw people for work, expats report low satisfaction across almost every category, from quality of life to ease of settling in. Harsh climate, limited leisure options and social isolation also add to the low ranking.
The Takeaway
Looking across all the results, one big trend stands out: Money matters more than ever. “Over the past few years, we’ve noticed that economic and financial uncertainty is reflected more and more in our rankings,” says Chudoba. “Countries that perform well in our Personal Finance Index are increasingly also at the top of the overall ranking.”
She points out that in 2025, with the exception of Saudi Arabia, all countries in the top 15 for Personal Finance are also where expats report the highest levels of happiness. “Looking back at 2022, this overlap was only around 50%,” says Chudoba.
It goes to show that the best countries to live in are defined less by postcard scenery and more by day-to-day realities. “Financial considerations have gained relevance, playing a more important role in how expats rate other aspects of life in their host country,” says Chudoba.
Where The Countries Ranked In 2025
- Panama
- Colombia
- Mexico
- Thailand
- Vietnam
- China
- UAE
- Indonesia
- Spain
- Malaysia
- Oman
- Saudi Arabia
- Philippines
- Cyprus
- Brazil
- Kenya
- Portugal
- Luxembourg
- Australia
- Qatar
- Czechia
- Netherland
- Austria
- Belgium
- Denmark
- Malta
- France
- Ireland
- Switzerland
- Hungary
- Poland
- Singapore
- Japan
- Greece
- South Africa
- United States
- Italy
- Sweden
- Norway
- Canada
- United Kingdom
- Germany
- Finland
- South Korea
- Türkiye
- Kuwait
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