Install Sierra as guest OS in VM with Parallels 12
I'm use VMware Fusion and just downloaded "Install macOS Sierra.app" from the App Store and then made an ISO Image to install from. The ISO Image should also work in Parallels Desktop.

To create an ISO Image from the "Install macOS Sierra.app" application bundle, I used the following bash script. Note: This requires 12 GB of free space to create but only uses 6 GB when finished.

In Terminal:

touch makeSierraISO
open makeSierraISO



Copy and paste the code below into the document, modifying the path to the InstallESD.dmg if necessary, then save and close.


Back in Terminal:

chmod u+x makeSierraISO


To run the script in Terminal: ./makeSierraISO

#!/bin/bash

hdiutil attach "/Applications/Install macOS Sierra.app/Contents/SharedSupport/InstallESD.dmg" -noverify -nobrowse -mountpoint /Volumes/esd
hdiutil create -o macOS_Sierra_10.12.0.cdr -size 6144m -layout SPUD -fs HFS+J
hdiutil attach macOS_Sierra_10.12.0.cdr.dmg -noverify -nobrowse -mountpoint /Volumes/iso
asr restore -source /Volumes/esd/BaseSystem.dmg -target /Volumes/iso -noprompt -noverify -erase
rm /Volumes/OS\ X\ Base\ System/System/Installation/Packages
cp -rp /Volumes/esd/Packages /Volumes/OS\ X\ Base\ System/System/Installation
cp -rp /Volumes/esd/BaseSystem.chunklist /Volumes/OS\ X\ Base\ System/
cp -rp /Volumes/esd/BaseSystem.dmg /Volumes/OS\ X\ Base\ System/
hdiutil detach /Volumes/esd
hdiutil detach /Volumes/OS\ X\ Base\ System
hdiutil convert macOS_Sierra_10.12.0.cdr.dmg -format UDTO -o macOS_Sierra_10.12.0.iso
rm macOS_Sierra_10.12.0.cdr.dmg
mv macOS_Sierra_10.12.0.iso.cdr macOS_Sierra_10.12.0.iso


Assuming you ran the script from your Home Folder in Terminal, then look for the file macOS_Sierra_10.12.0.iso in your Home Folder. Use Parallels to create new VM. Point the new VM wizard to that .iso file. Parallels may complain, saying it is unable to recognize the OS being installed. Proceed and choose macOS from the offered menu.