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Prostitution in Paraguay is legal for persons over the age of 18,  but related activities such as brothel keeping are prohibited.
There are about 30 "motels" in and around the city that cater for illicit sex. Rented by the hour, the suites are approached through a garage so people can't be seen entering or leaving. Any refreshments required are ordered by telephone and delivered through a flap in the door, payment is also made through the flap; the staff never see the guests. Many women turned to prostitution. An unfinished theatre was converted into a brothel where women worked and lived; when the occupying troops withdrew from the city, the Argentinian National Guard took prostitutes back to Buenos Aires with them.
In an attempt to 'clean up' the city, the authorities shipped many prostitutes to rural areas of the country. HIV is a problem in the country and sex workers are a high group. Since the government has been running a scheme for sex workers as part of their "Struggle Against AIDS" campaign. Social and health workers offer support, information, free testing and distribute condoms. Child prostitution is a problem. Street children and working children are common targets for trafficking recruiters.
Paraguay is a source, destination, and transit country for men, women, and children subjected to sex trafficking. Paraguayan women and girls are subjected to sex trafficking within the country, and transgender Paraguayans are vulnerable to sex trafficking. Thousands of Paraguayan children work as domestic servants in exchange for food, board, and occasionally education or a small stipend in a system called criadazgo; many of these children are subjected to domestic servitude and are highly vulnerable to sex trafficking.
Indigenous persons are particularly at risk for sex trafficking. In , authorities reported at least 24 Paraguayan women were recruited for work in Turkey and later exploited in forced prostitution in brothels throughout Turkey, Spain , and the northern area of Cyprus administered by Turkish Cypriots; the reliance of international trafficking rings on local recruiters remains a problem.