Multinational businesses are more likely to steer clear of investments in Latin America than they are in other parts of the world due to perceptions of pervasive bribery and a high level of corruption risk in the region, according to a survey by Hogan Lovells.

Compliance work has become big business for global law firms operating in Latin America as investors seek to avoid violations of laws such as the U.S. Department of Justice's Foreign Corrupt Practices Act—and associated fines.

The survey, which looked at all aspects of anti-bribery and corruption compliance, collected opinions from 700 chief compliance officers and heads of legal departments at multinational companies with at least 2,000 employees in the U.S., Europe and Asia. The countries they mentioned most frequently as places in Latin America they chose not to enter due to corruption concerns were Brazil, Argentina, Bolivia and Belize.

Massive corruption scandals and sociopolitical instability in several Latin American countries have led to a perception that these markets are high risk, Hogan Lovells said. That perception is especially acute in Latin America's largest economy, Brazil, where nearly six years ago authorities unfurled Operation Car Wash—a probe into illicit payments by construction firm Odebrecht.

Those allegations rippled through Latin America, even implicating former presidents of countries where Odebrecht does business.

At the same time, Operation Car Wash signaled a willingness and ability in Brazil to crack down on corruption. Attitudes seem to be changing as a result, Hogan Lovells said, with company leaders and employees in Brazil much more open to compliance training and more willing to engage in the fight against bribery and corruption.

"Companies have to step back and take this issue seriously," said Isabel Costa Carvalho, Hogan Lovells' managing partner in São Paulo. "Despite the desire for growth, they must introduce and implement robust compliance programs or risk facing fierce public prosecutors and significant penalties."

Since Operation Car Wash, Mexico and Argentina have also passed anti-corruption legislation that includes tough criminal liability and steep penalties.

Globally, Hogan Lovells found that business leaders are struggling to balance the quest for corporate expansion amid slow economic growth with increased compliance pressure.

Some 90% of compliance leaders feel pressure to proceed with their growth strategy in Asia, Latin America and Africa despite bribery and corruption concerns, according to the survey. In addition, about half of compliance leaders report that many people in their business still fail to follow compliance procedures.

Compliance leaders believe that bribery and corruption in one country often suggest regionwide problems. Over 60% of the participants in the Hogan Lovells survey said that if they found bribery and corruption issues in one jurisdiction, it was likely to be an issue across the whole region, affecting their organization's decision to conduct business in that part of the world.

Government corruption causes the most concern, cited as one of the main reasons for avoiding a market by four out of five compliance leaders. Almost half of companies rely on government contracts in Latin America and Africa, two regions heavily plagued by corruption.

Meanwhile, around the world, businesses say that technologies such as chat apps are making it harder to monitor bribery and corruption, while the growth of cryptocurrencies is also a concern.