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Tons of gold + norse culture + germanic pope is great
Denmark. A lot of base holdings and a ton of coastal provinces in your home zone. Gotland is good for similar reasons. Rostock (Rastoku?) in Mecklenburg is a decent spot with a few holdings and a good home zone.
I'm partial to Kurzeme/Curonia myself. Small duchy but a lot of counties touching your home zone there too.
If you're looking to just roll as a Viking and invade somewhere, I'm not as sure what would be ideal; I mostly look at tribal starts. I think Tangiers is a solid location, and Duchy, if you want to go that route. Also fits as an awesome location RP wise. The Crimea area (Kingdom of Taurica pre-M&M patch) is all coastal and could be a really good location to set up, but you'd be limited trying to get out into the Mediterranean without using a lot of city conquests.
The fact you are norse also makes it unlikely that you will be targetted by raiders as a merch republic as you are one, removing a big issue to the early game.
The capital (cant remember the S name of the central duchy) has 6 holding slots, and you can stack a pile of extra cities in it for more gold and holdings for yourself.
So the best locations for a merchant republic is going to be the trade zone around Venice and the one around the Isle of Man. However, they're both single county duchies so you won't get much of a levy bonus from having your capital there, not to mention the Isle of Man only has three holdings.
As others have mentioned, Denmark is a very good place to set up a merchant republic. All your counties are coastal, and you're likely going to be a norse pagan so other norse pagans are unlikely to raid you.
Personally, I prefer the duchy of Holstein, which is part of Saxony or Denmark depending on your start date. It's a 4 county duchy, with a total of 22 holding slots, all coastal. When you're tribal, you'll be basically the strongest high chief around due to the empty holding slots. And even if you become a genius midas touched emperor with max centralization and absolute rule, it's unlikely that you'll be able to control all the holdings in the duchy. Which means that all your holdings will get the benefit of being in your capital duchy.
I have read somewhere that it's better to have it in a small area as opposed to spread out :(
Republics are so confusing.
You really want to maintain the connected to capital bonus. It's easy with zones like the one around Venice, but can get weird when you move out to other zones.
Often to maintain it, you have to become a thalassocracy with seemingly random city and/or county holdings in far flung places.
There is no competition from other republics that far north. But the constant infighting between the Franks prevents most counties from prospering and sometimes your posts get sieged when you get dragged into their wars. Another downside is... vikings! OMG do they love to treat me like their piggy bank.