Immigration New Zealand is closely monitoring brothels and says it will charge them with "aiding and abetting" illegal prostitutes to remain in the country if they rent out beds to them.
The agency is expecting a surge in foreign sex workers entering the country in the coming months to meet an expected increased demand during the Rugby World Cup.
Although prostitution has been decriminalised, it is illegal for visitors on temporary visas, such as students and tourists, to work in the sex industry.
Several brothel owners have said they plan to get around the law by treating foreign prostitutes as "tenants" rather than "contractors or employees", so they will not be responsible for the immigration status of the sex workers.
But Immigration NZ is alert to this ploy.
"A brothel owner who allows a foreign national to provide commercial sexual services is aiding and abetting a person to either remain in NZ unlawfully or breach the conditions of their visa," said Steve Stuart, general manager of intelligence, risk and integrity.
"Given that a brothel owner will receive payment, it is likely they will contravene section 343(1)(a) of the Immigration Act 2009."
The section carries a maximum penalty of up to seven years' imprisonment and/or fines of up to $100,000.
"While we will not discuss the specifics of our compliance investigations, we are monitoring this sector closely," Mr Stuart added.
Under the Prostitution Reform Act 2003, only NZ citizens and people with residency can work in the sex industry.
Last week, a brothel keeper was sentenced to 300 hours of community work after being found guilty of attempting to smuggle a prostitute into New Zealand.
Several brothels in central Auckland and on the North Shore are offering hourly room rentals "for couples" from $30.
Foreign prostitutes, working illegally here, said they chose New Zealand because it was low risk.
"The worst thing that can happen if we are caught is getting sent back home," a prostitute from Seoul said.
She said that in South Korea, where prostitution is a crime, selling sexual services could cost her a year in prison and a fine of nearly $4000.
A health worker, who did not want to be named, said the potential spread of sexually transmitted infections and HIV by foreign prostitutes was a worry.
"Unlike those coming here on proper work visas, there is no health screening for most of those who come as tourists," she said. "Many prostitutes overseas, especially those in Asia, are also more likely to not practise safe sex."
A 2009 survey of 1000 clients of female prostitutes in China found condom use in only about 40 per cent of sex transactions.
The New Zealand Prostitutes Collective said the illegal foreign sex workers who came here were predominantly Chinese.