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Escort agencies are companies that provide escorts for clients, usually for sexual services. The agency typically arranges a meeting between one of its escorts and the client at the customer's house or hotel room (outcall), or at the escort's residence (incall).
Some agencies also provide escorts for longer durations, who may stay with the client or travel along on a holiday or business trip. While the escort agency is paid a fee for this booking and dispatch service, the customer must negotiate any additional fees or arrangements directly with the escort for any other services that are not provided by the agency involved, such as providing sexual services (regardless of the legality of these services).
Escort agencies claim that they are dispatching these individuals to provide a social or conversational service rather than a sexual service, since prostitution laws often forbid taking payment for sex or communicating for the purpose of arranging a contract for sexual services.
Advertisements for escort agencies often carefully skirt the legal line, and avoid specifically offering prostitution or sexual services. This fact in turn is well-known to police and the political powers, who, where prostitution is illegal, usually prefer to act against more visible and problematic street prostitution.
This has been criticized as hypocrisy, especially where governments license and tax the escort agencies.
However, there almost certainly do exist agencies that do go by these laws and do not facilitate prostitution. Some countries have used a two-pronged approach of criminalizing street prostitution but permitting or licensing prostitution in brothels or via escort agencies.