Virtual folders are easily attainable using Alfresco Workdesk.
If we assume that you're talking about Alfresco Share, the answer is still yes you can, but it is much more difficult to achieve (compared to what Alfresco Workdesk is able to provide). If you examine the Document Library, you can see that there are different "filters" to filter your views (examples: My Favorites, Categories, Tags, ….). These are essentially "Virtual Folders". Hopefully you can see where I'm going with this…
So yes, you can do this in Share, but afaik, it's going to be a significant effort to implement.