There is no best model. There is a right model for the stage your company is at, the kind of work you need done and how much control you want to keep.

In-house

Makes sense when software is the product and accumulated knowledge is the competitive advantage. It is the most expensive and slowest to assemble, but the only one that retains knowledge inside the company long term.

Nearshore

A team in another country with a compatible time zone and, ideally, the same legal framework. It wins on speed of start-up and on cost, while keeping almost all the communication fluency of an in-house team. That is where Portugal fits for European and US East Coast clients.

Offshore

The lowest cost of the three, with the price paid elsewhere: time zones with no overlap, layers of middle management and a more complex contractual setup. It works well for tightly specified work and badly for exploratory work.

The questions that decide it

• How many hours a day do you need the team available at the same time as yours?
• Is the work well specified, or will it be discovered along the way?
• How long until you need visible results?
• What compliance and data protection requirements must you meet?
• If this partner disappeared tomorrow, what would you be left with?

Answer those five and the choice is usually obvious — and rarely the cheapest at first glance.