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Borscht and vareniki are on the menu at Taras Bulba, a restaurant named after Nicolai Gogol's Ukrainian folk hero. It's one of many Russian-owned businesses in Limassol, Cyprus.

Approximately 30,000 Russians live in this city — about a quarter of the population. There are Russian hair salons, supermarkets, schools and even a radio station.

Limassol's mayor, Andreas Christou, studied mechanical engineering in Moscow and speaks Russian fluently. He says Russians came to the city in droves after the collapse of the Soviet Union in 1991.

"They came here because Cyprus had a reputation as a serious and reliable business center," Christou says. "This reputation was well-known."

Cyprus offered a low corporate tax rate, stable banks and rule of law. Today, Russians hold about one-quarter of all deposits in Cypriot banks — approximately 24 billion euros — roughly $30 billion.

But Michalis Papapetrou, a Cypriot lawyer with many Russian clients, says the wealthiest Russians don't live in Cyprus and do not deposit most of their money here.

"Russians and other foreigners, they form Cyprus companies and through this vehicle, they carry back their money to their countries for investment," Papapetrou says.

Many of those who do have their money here, Papapetrou says, did not expect the eurozone to make the surprise decision to use bank savings to subsidize the bailout.

"I have a client here from Russia that has a deposit in the Bank of Cyprus of 100 million," he says.

The bank is the country's largest lender and just announced that depositors with more than 100,000 euros could lose 60 percent of their deposits as part of the bailout deal. With such a hit to their wealth, Papapetrou expects some clients to flee.

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