-An important issue in dynamically constructed Virtual Private Networks (VPN) is how the overlay topology is created and maintained. Classical VPN topologies, such as huband-spoke or full-mesh, fail to remain convenient and viable when the number of nodes grows to as little as a few tens. Convenient topology formation mechanisms should be distributed, should permit incremental and dynamic operations, and should limit the number of nodes a new entry connects with. In this work, we show that approaches devised to create "short" networks, while yielding a significant total network throughput, may be severely affected by unfairness issues, i.e., different pair of nodes may experience a widely different throughput performance. Hence, we introduce a fairness-oriented topology formation algorithm for VPN. The proposed algorithm is incremental, meaning that the addition of a new node to the overlay topology does not imply rewiring of already established overlay links. Simulation results show that our proposed approach achieves high fairness levels, as quantified in terms of well known Jain's fairness index, meanwhile retaining satisfactory throughput performance.