Service-oriented computing represents an emerging paradigm where software functionalities are delivered to consumers as services rather than products. Serviceoriented applications consist of services available on the Internet and the coordination logic that binds independent services into the application-specific workflow. Execution of distributed applications in shared and dynamic Internet environments faces two open issues: security of service invocation and dependence of coordination logic on physical distribution of services. In this paper, we propose a model for development and execution of serviceoriented applications based on a virtual network. Virtual network provides the environment for secure execution of service-oriented applications independent of the physical network configuration. Virtual network is based on service-oriented architecture, which enables run-time management of virtual network by users and distributed applications.