Living & Working Abroad in 2025: What Expats Need to Know
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2025 is shaping up to be a year of major change for expats and globally mobile families. Economies are adapting, tax rules are shifting, and technology is reshaping how we live, work, and even travel. Here’s what’s happening right now:
1. The Global Economy – Resilient, but Fragile
Forecasts for 2025 look steady on the surface, with global growth hovering around 3%. Inflation is finally easing, helped by lower commodity prices. But scratch deeper and vulnerabilities remain.
Geopolitical risks (US-China trade tensions, ongoing conflicts, sanctions) make stability fragile.
Inflation in housing and services is still sticky, keeping pressure on household budgets.
Central banks are cautious: expect slow, shallow interest rate cuts rather than big moves.
In short: the world economy may be “resilient,” but it’s balancing on a knife edge.
2. The UK – Tax Shake-Up & Rising Pressures
The UK is overhauling its tax and residency rules from April 2025.
Non-dom status abolished: The old domicile-based system is gone. Instead, a new 4-year “Foreign Income & Gains” (FIG) regime offers temporary relief for new arrivals. After that, worldwide income and assets fall into the UK tax net.
Inheritance Tax expanded: Worldwide assets will face UK IHT after 10 years of residency, and liability lingers for 10 years after leaving. UK pension funds will also fall into IHT from 2027.
Cost of living squeeze: Inflation sits at 3.6%, rents and groceries continue to rise, while wages struggle to keep up.
Immigration tightened: Higher skill thresholds make it harder for mid-level workers to secure visas, putting more strain on labour shortages.
Takeaway: For high-net-worth individuals, the UK offers short-term opportunity but a long-term tax trap. For households, the pressure is relentless.
3. Cyprus – Opportunity and Reality
Cyprus is emerging as one of the big winners from the UK reforms.
Tax perks: No inheritance tax, limited capital gains tax, and favourable pension rules make it attractive for retirees and investors.
The pension puzzle: Moving UK pensions to Cyprus is not straightforward due to the 25% Overseas Transfer Charge and lack of approved QROPS on the island. Specialist advice is critical.
Lifestyle: Safe, sunny, and family-friendly – but bureaucracy, slower pace, and the infamous meso (who you know) culture require patience. Even simple tasks can take weeks.
Cyprus is paradise for many expats, but it’s not “plug and play.” It demands adjustment as much as it offers benefits.
4. Technology – AI Everywhere (and Not Always Working)
Artificial Intelligence dominates 2025.
Businesses are adopting AI agents as “virtual coworkers,” handling multi-step tasks.
Robotics are moving from factory floors to daily life, with AI-driven repairs and logistics.
Nuclear energy is back in fashion, pushed by AI’s huge demand for power.
But it’s not all smooth sailing. This year has seen AI chatbots leaking millions of personal records, recipe apps suggesting chlorine gas for dinner, and databases accidentally deleted by AI “helpers.”
Lesson: AI is here to stay, but it still needs human oversight – and a strong password.
5. Travel & Global Mobility – More Rules, More Red Tape
Borders are going digital in 2025.
UK: Electronic Travel Authorisation (ETA) is now mandatory.
EU: New Entry/Exit biometric system replaces passport stamping.
US: REAL ID required for domestic flights.
Nomad visas: More countries than ever are offering Digital Nomad Visas, but rules vary wildly – from $9,800 annual income in Albania to $75,000 in Belize.
Freedom of movement isn’t dead, but it’s now more bureaucratic than ever. For nomads, the dream is alive - but so are the practical headaches of visas, border checks, and the occasional bout of food poisoning.
Final Word
2025 is a year of transition. The UK is clamping down on tax breaks, Cyprus is capitalising, AI is both powering and puzzling us, and global mobility is being reshaped by digital red tape.
For expats and internationally minded families, the message is clear:
Plan ahead – tax, pensions, and visas are more complex than ever.
Stay flexible – the global economy is resilient, but fragile.
Adapt quickly – technology and bureaucracy are moving faster than most individuals can.
In a world this fluid, foresight and agility are your best assets.
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ProACT Partnership assist clients to provide a tax base in Cyprus.
An individual working remotely. A family relocating living or working abroad in Cyprus. Those retiring to enjoy pension income at low income tax rates. Businesses wanting an intentional base with minimum corporation taxes for trading or holding. Families who want to hold shares, property, business, investment in a secure inheritance tax free holding.
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