Is an adjustment of status or consulate interview recommended? Why?

You could proceed with either an I-485 or the immigrant visa process. If you file an I-485, then you will not need to obtain a new E-2 visa.

If the case is squeaky clean, consular process. But it depends on which country you go to, as some posts re-educate the petition. To adjust, you must never have been out of status or worked without permission.

An adjustment of status will operate well since you have a valid status and currently reside in the U.S. Advisably, avoid unnecessary forum shopping by seeking consular processing, as you seem to suggest.

Consular process is always an option. However, in your situation, you have an E-2 visa that can be revoked for immigrant intent. I would suggest you wait patiently for the approval of your I-485 instead of pursuing consular processing.

You first need to determine how your I-526 was filed: requesting adjustment of status or consular processing upon approval of I-526. If consular processing was requested, NVC will send you or your attorney of record the initial notice regarding your case and visa bill. You will need to pay a visa bill and submit civil documents to get a consular interview letter in your home country. On average, consular process takes about a year but may be done in three to six months if all documents are prepared in advance and no complications with consular interview scheduling arise. If your I-526 requested AOS, then your attorney will need to file I-824 to switch to consular processing and request that USCIS send a file to NVC. This takes on average four to nine months and the NVC notice will take another one to three months to arrive to start the consular processing case. An adjustment of status may be less risky than a consular processing outside the U.S. and you will get your EAD and travel document in about three months after filing for AOS.

There are pros and cons with regards to whether to go through adjustment of status versus consular processing to apply for your immigrant visa. Normally, we would always recommend adjustment of status for a very simple reason: should there be an issue and a delay and you are stuck, you can wait physically in the U.S., where you want to be and where you are living and working. If you have a problem abroad and you are stuck waiting for a resolution, you could be ineligible to enter the U.S. for some period of time, although as you indicated, it might be possible for you to enter on your E-2 non-immigrant visa. Furthermore, if there is a problem while you are in the U.S. you are covered by the U.S. constitution. If there is a problem on a particular issue, you are eligible for both administrative and even judicial review. If the same problem occurs at the American consulate abroad you are not eligible for any administrative or judicial review and the informal review process is at best difficult. There may be some advantages to consular processing timewise and you will have to take that into consideration, but from a legal point of view adjustment of status is always the better option.

There are pluses and minuses with both adjustment and consular processing; however, the biggest advantage of going through adjustment of status in the U.S. is the ability to file for a work permit and advance parole, so that while your adjustment application is pending, you can live and work in the U.S. and be able to freely travel abroad without having to depend on a visa.

Either is OK; consular would be faster. You can remain in the U.S. until the interview is scheduled, provided that you selected consular on the I-526. Otherwise, you would need to first file the I-824 to switch to consular if your attorney selected adjustment.

If you are already in the U.S. in legal status, you may adjust your status. Since there is no rule that you must, you are free to the embassy process. Just advise CIS so that they know where to send your documents.

As an E-2 holder, I recommend you the consular process. There are several reasons for this, besides the timeline.

If your lawyer marked that you were in valid status and will adjust status on the I-526 form, you must request that your file be sent to National Visa Center (NVC) by filing I-824, which takes four to eight months. If, on the other hand, I-526 was marked, as you will do consulate processing, you may elect to do the consulate processing by merely waiting for the visa fee bills to be issued in about two to three months. Thus, it would depend on how your lawyer prepared the I-526. Not all EB-5 clients are getting interview notices and you may be able to get the I-485 adjustment done quicker than two years, even in California.

There is always some risk. Yes, foreign nationals are allowed to go back to their country to obtain visas, including e-visa holders.