The women had entered Taiwan on tourist visas with purposes of "short sightseeing," EBC News reported.
Their arrests came after police officers raided an illegal club located in the basement of a building in Taipei based on tip-offs from local residents, according to Taiwan News.
Officers said the club had been operating for more than three months and the Thai women were exclusively recruited to work as hostesses.
In addition to the group of the Thai tourists, 20 other patrons and the owner of the club were taken to a police station for questioning.
Police are expanding the investigation.
Under Taiwan’s current regulations, foreigners working illegally in Taiwan could be fined between US$980-4,900 and will be expelled from the country immediately.