Add VIRTUAL output to Xorg

Create a 20-intel.conf file:

sudo vi /usr/share/X11/xorg.conf.d/20-intel.conf

Add the following configuration information into the file:

Section "Device"
    Identifier "intelgpu0"
    Driver "intel"
    Option "VirtualHeads" "2"
EndSection

This tells the Intel GPU to create 2 virtual displays. You can change the number of VirtualHeads to your needs.

Then logout and login. You should see VIRTUAL1 and VIRTUAL2 when you run xrandr.

Note if you were using the modesetting driver previously (which is the modern default) switching to the intel driver will cause the names of displays to change from, eg, HDMI-1 or DP-1 to HDMI1 or DP1.

In case of black screen on boot with 20-intel.conf, create a 30-virtscreen.conf with these contents:

# nvidia/nouveau/amdgpu device should be configured first before Intel GPU
Section "Device"
  Identifier "nvidiagpu0"
  Driver     "nvidia" # Because you are using Nvidia proprietary driver. Change to "nouveau" if you are using open source nouveau driver
EndSection

# Then configure intel internal GPU
Section "Device"
  Identifier "intelgpu0"
  Driver     "intel"
  Option     "VirtualHeads" "2"
EndSection

I found this solution on the Issues page of the kbumsik/VirtScreen Github project.