Without taking a stance on whether it should be legal or illegal, it should be noted that Fragony may have a point.
Illegal: no regulations whatsoever to respect (not sure if that's a good thing, obviously...);
Legal: you'll need an accountant. Taxes. VAT (do you know how much paperwork VAT takes for an honest business(wo)man? It's insane, at least in Belgium it is, certainly if you're a small one-(wo)man business, it's really hard to deal with it. And if you're alone, hiring somebody to do it for you is very expensive). Taxes. Oh, and taxes. And of course taxes. You'll probably also need some sort of a license, various permits, civil servants and politicians to deal with, probably a few disgruntled neighours who don't agree with a brothel next to them and let's face it, paying a lawyer to defend you in some lawsuit is more expensive then hiring some muscles to make the neighbour shut up. Or just let the annoying neighbour visit your business once a month for free. Paperwork, paperwork, paperwork, because governments have a tendency to give an honest business(wo)man shiploads of paperwork to do, etc etc. Paperwork increases costs. Insurance will be needed as well. Maybe some strict regulations on let's say safety. And we're not even talking about all the paperwork that needs to be done when you hire employees. And social security. Oh yes, that too. So no, making it legal won't make it cheaper for the customer, on the contrary. The government and all its' regulations will be way more expensive then even the most greedy pimp.
I'm also not sure that, given the sphere in which this particular profession takes place, making it legal will improve the working conditions.
By making it legal, you'll be suffocating the honest businessmen and women involved in prostitution.
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