A regional center with one or more foreign investors can only be legally taxed as a C corporation, irrespective of whether they choose to be structured as corporation, partnership (LP or LLP) or LLC. This means DOUBLE taxation, once at the corporate level and once at the personal level. If any Regional center fails to do this, they are deliberately committing tax fraud.
If you start your business as sole proprietorship and then change into an S Corp or LLC after some time, you are eligible to have a significantly reduced tax rate. If you are invested in a Regional Center, it CANNOT, by law, offer pass through taxation till such time as even ONE foreign investor is invested.
So, for instance, if we take the example of an investor who invests in a RC, which earns 100 dollars as the investor's share of profit, it has to first deduct at least 15% (usually more) of that as taxes, before disbursing dividends to the investor(if they actually do that at all). Then, the investor has to pay federal income and usually also state taxes on that income. This means, for every $100 of profit earned by the investor, (s)he has to at least lose 20% of the money in taxes, if not more. Plus, a lot of the deductions are simply unavailable to C Corporations and this essentially reduces the effective yield and ROI. The final bit comes at the time of exit when capital gains tax may be imposed, thus reducing ROI even further.
On the other hand, if the same investor invested in his own sole proprietorship, they would have the option to later change into S corp or LLC and avoid double taxation altogether and have access to a whole lot of deductions.
The above is simply my own opinion and is NOT to be construed as professional or legal advice.
For further info, you could either contact CPA Pinky Shodhan from Los Angeles, CA (if you're on the west coast) or CPA Azfar Syed from Kissimmee, FL if you're on the east coast to get proper professional advice on the tax implications and structure of your business. I know them both personally and can vouch for their competency to provide tax and audit advice for small and medium sized businesses up to $60,000,000. They will be able to guide you in a professional manner on forming and structuring your business to reduce liability and avoid paying excessive taxes.
Ms. Shodhan's email is email@example.com and Mr. Syed's number is (407) 935-1099.