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Abstract This study reported domestic and overseas Taiwanese people’s perceived stress levels and examined the mediation effect of their coping strategies during the early stages of the COVID-19 pandemic. We recruited 2727 Taiwanese respondents from the COVIDiSTRESS Global Survey (N = 173,426) between March 30 and May 30, 2020. The self-report questionnaire included a modified 10-item Perceived Stress Scale and a 16-item coping strategy scale. Three stress-coping factors were extracted with principal component analysis and confirmatory factor analysis. Their effects were examined through a regression and mediation analysis. The overseas Taiwanese participants had a significantly higher stress level than domestic counterparts (2.89 to 2.69 in 1–5 scale, p < 0.001). Government guidance was associated with lower stress level among domestic (− 0.097, 95% C.I. [− 0.131, − 0.063]) but not overseas Taiwanese (0.025, [− 0.114, 0.163]). The association of stress level with residency was mediated by coping strategies, for government guidance (0.04, [0.01, 0.07], ref: domestic participants) and supportive social networks (− 0.03, [− 0.05, − 0.01]). All results hold after the propensity score matching on samples. Government guidance on COVID-19 as a channel for coping with stress is correlated with the residency status of the respondents. Public health authorities should recognize the importance of various mental health interventions during pandemics.