Applicants for Permanent Residence "must apply in your country of residence, your country of nationality, or the country where you have been legally admitted for at least one year."  Where you fit in may be difficult to determine.  Most people logically assume that where they are (or want to be) when it's time to submit an application for PR makes the determination for them, but this isn't correct.   The truth is that the designation of "inland" vs "outland" is really only about which CIC office will be responsible for processing the application. 

'Inland' applications are processed entirely within Canada, and give foreign nationals who are not able to return to their home countries the ability to stay in Canada with their sponsor for the duration of the application process.  Overall, the inland application process can take from 12-18 months, with the processing time for first stage assessment varying considerably. 

'Outland' applications begin assessment in Canada, at the Case Processing Centre in Mississauga, Ontario.  This is where the sponsor's eligibility is assessed.  If the sponsor is approved, the application is then transferred by CPC-M to an overseas visa office - based on the criteria mentioned above.  Typically an application will be transferred to the embassy that represents an applicant's country of birth/citizenship.  Processing timelines vary from one embassy to another.  Processing timelines can be found on the CIC website by following the homepage link "Check Application Processing Times".

Inland vs Outland Applications