Note: this feature is currently not supported in Parallels Desktop on Mac computers with Apple M1 chip.

Parallels Desktop provides nested virtualization support that allows you to run virtual machines inside of virtual machines. The list of the supported virtualization platforms (such as Hyper-V) is available in KB 123975. Nested virtualization is available in Parallels Desktop for Mac Pro and Business Editions only. 

It is also worth noting that enabling nested virtualization significantly affects the performance of a virtual machine.

To enable nested virtualization, please perform the following steps:

1. Make sure that the virtual machine is shut down. If it is in a suspended state, please run it and then shut down (Actions > Shut Down).
2. Open the virtual machine configuration > Hardware > CPU & Memory, click Advanced, and set the hypervisor to Parallels. After that, tick the Enable nested virtualization checkbox.

Note: Nested virtualization is currently not supported for the Apple hypervisor.