Last month I discussed the US tax considerations applicable to DUNAs.
Since then, I've been asked several times: "can we start with a DUNA and later change our minds?"
The short answer is: probably not. Under the tax code's "anti-inversion" rules, once you've conceded US corporation treatment, you're basically stuck with it.
I've previously explained why, for tax purposes, a "true" DAO - one whose actions consist exclusively of onchain votes to run (or not run) self-executing code, and whose treasury assets consist exclusively of its native token - likely (1) isn't an entity or (2) defaults to foreign corporation.
Let's set that aside for this post and assume we're working with a DAO that needs to be wrapped. One potential US tax benefit of wrapping in an offshore tax haven instead of onshore is the DAO preserves its ability to shed its legal entity in the future.
By contrast, if the DAO starts off as a domestic "C" corporation - which is what it typically would be if organized as an UNA or DUNA - it would continue to be taxed as a domestic corp even if it later transitions to a wrapped foreign corp or unwrapped deemed foreign corp. That's because the anti-inversion rules treat foreign-redomiciled corps as domestic if their owners stay the same. The idea is to keep US mega-corps from redomiciling to low-tax jurisdictions.
Obviously the anti-inversion rules discourage new corps from organizing in the United States. This isn't the only situation where US tax law encourages investment in offshore tax havens over the United States. In 2011, my mentor wrote a 70-page paper detailing other scenarios where this happens outside of crypto. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1684716
Are there situations where UNAs or DUNAs might make sense? As I note in the post linked at the top, yes. Just beware: once you elect into the US tax net, you might be stuck here forever.