diff --git a/src-web/commands/openWorkspaceFromSyncDir.tsx b/src-web/commands/openWorkspaceFromSyncDir.tsx
index 2b79c1aa..ba354d12 100644
--- a/src-web/commands/openWorkspaceFromSyncDir.tsx
+++ b/src-web/commands/openWorkspaceFromSyncDir.tsx
@@ -1,20 +1,11 @@
-import { open } from '@tauri-apps/plugin-dialog';
 import { applySync, calculateSyncFsOnly } from '@yaakapp-internal/sync';
 import { createFastMutation } from '../hooks/useFastMutation';
 import { showSimpleAlert } from '../lib/alert';
 import { router } from '../lib/router';
 
-export const openWorkspaceFromSyncDir = createFastMutation<void>({
+export const openWorkspaceFromSyncDir = createFastMutation<void, void, string>({
   mutationKey: [],
-  mutationFn: async () => {
-    const dir = await open({
-      title: 'Select Workspace Directory',
-      directory: true,
-      multiple: false,
-    });
-
-    if (dir == null) return;
-
+  mutationFn: async (dir) => {
     const ops = await calculateSyncFsOnly(dir);
 
     const workspace = ops
diff --git a/src-web/components/CreateWorkspaceDialog.tsx b/src-web/components/CreateWorkspaceDialog.tsx
index 2b80f4db..c1501560 100644
--- a/src-web/components/CreateWorkspaceDialog.tsx
+++ b/src-web/components/CreateWorkspaceDialog.tsx
@@ -20,7 +20,7 @@ export function CreateWorkspaceDialog({ hide }: Props) {
   const [syncConfig, setSyncConfig] = useState<{
     filePath: string | null;
     initGit?: boolean;
-  }>({ filePath: null, initGit: true });
+  }>({ filePath: null, initGit: false });
 
   return (
     <VStack
@@ -62,8 +62,8 @@ export function CreateWorkspaceDialog({ hide }: Props) {
 
       <SyncToFilesystemSetting
         onChange={setSyncConfig}
+        onCreateNewWorkspace={hide}
         value={syncConfig}
-        allowNonEmptyDirectory // Will do initial import when the workspace is created
       />
       <Button type="submit" color="primary" className="ml-auto mt-3">
         Create Workspace
diff --git a/src-web/components/SyncToFilesystemSetting.tsx b/src-web/components/SyncToFilesystemSetting.tsx
index 430b1134..2adc65bc 100644
--- a/src-web/components/SyncToFilesystemSetting.tsx
+++ b/src-web/components/SyncToFilesystemSetting.tsx
@@ -1,33 +1,54 @@
 import { readDir } from '@tauri-apps/plugin-fs';
 import { useState } from 'react';
+import { openWorkspaceFromSyncDir } from '../commands/openWorkspaceFromSyncDir';
 import { Banner } from './core/Banner';
+import { Button } from './core/Button';
 import { Checkbox } from './core/Checkbox';
 import { VStack } from './core/Stacks';
 import { SelectFile } from './SelectFile';
 
 export interface SyncToFilesystemSettingProps {
   onChange: (args: { filePath: string | null; initGit?: boolean }) => void;
+  onCreateNewWorkspace: () => void;
   value: { filePath: string | null; initGit?: boolean };
-  allowNonEmptyDirectory?: boolean;
   forceOpen?: boolean;
 }
 
 export function SyncToFilesystemSetting({
   onChange,
+  onCreateNewWorkspace,
   value,
-  allowNonEmptyDirectory,
   forceOpen,
 }: SyncToFilesystemSettingProps) {
-  const [error, setError] = useState<string | null>(null);
+  const [isNonEmpty, setIsNonEmpty] = useState<string | null>(null);
   return (
     <details open={forceOpen || !!value.filePath} className="w-full">
       <summary>Data directory {typeof value.initGit === 'boolean' && ' and Git'}</summary>
       <VStack className="my-2" space={3}>
-        <Banner color="info">
-          Sync workspace data to folder as plain text files, ideal for backup and Git collaboration.
-          Environments are excluded in order to keep your secrets private.
-        </Banner>
-        {error && <div className="text-danger">{error}</div>}
+        {isNonEmpty ? (
+          <Banner color="notice" className="flex flex-col gap-1.5">
+            <p>The selected directory must be empty. Did you want to open it instead?</p>
+            <div>
+              <Button
+                variant="border"
+                color="notice"
+                size="xs"
+                type="button"
+                onClick={() => {
+                  openWorkspaceFromSyncDir.mutate(isNonEmpty);
+                  onCreateNewWorkspace();
+                }}
+              >
+                Open Workspace
+              </Button>
+            </div>
+          </Banner>
+        ) : (
+          <Banner color="info">
+            Sync workspace data to folder as plain text files, ideal for backup and Git
+            collaboration. Environments are excluded in order to keep your secrets private.
+          </Banner>
+        )}
 
         <SelectFile
           directory
@@ -37,12 +58,13 @@ export function SyncToFilesystemSetting({
           onChange={async ({ filePath }) => {
             if (filePath != null) {
               const files = await readDir(filePath);
-              if (files.length > 0 && !allowNonEmptyDirectory) {
-                setError('The directory must be empty');
+              if (files.length > 0) {
+                setIsNonEmpty(filePath);
                 return;
               }
             }
 
+            setIsNonEmpty(null);
             onChange({ ...value, filePath });
           }}
         />
diff --git a/src-web/components/WorkspaceActionsDropdown.tsx b/src-web/components/WorkspaceActionsDropdown.tsx
index 15449cb7..316d9300 100644
--- a/src-web/components/WorkspaceActionsDropdown.tsx
+++ b/src-web/components/WorkspaceActionsDropdown.tsx
@@ -1,3 +1,4 @@
+import {open} from "@tauri-apps/plugin-dialog";
 import { revealItemInDir } from '@tauri-apps/plugin-opener';
 import classNames from 'classnames';
 import { memo, useCallback, useMemo } from 'react';
@@ -75,7 +76,16 @@ export const WorkspaceActionsDropdown = memo(function WorkspaceActionsDropdown({
       {
         label: 'Open Existing Workspace',
         leftSlot: <Icon icon="folder_open" />,
-        onSelect: openWorkspaceFromSyncDir.mutate,
+        onSelect: async () => {
+          const dir = await open({
+            title: 'Select Workspace Directory',
+            directory: true,
+            multiple: false,
+          });
+
+          if (dir == null) return;
+          openWorkspaceFromSyncDir.mutate(dir);
+        },
       },
     ];
 
diff --git a/src-web/components/WorkspaceSettingsDialog.tsx b/src-web/components/WorkspaceSettingsDialog.tsx
index 05b406b4..5d1d900b 100644
--- a/src-web/components/WorkspaceSettingsDialog.tsx
+++ b/src-web/components/WorkspaceSettingsDialog.tsx
@@ -63,6 +63,7 @@ export function WorkspaceSettingsDialog({ workspaceId, hide, openSyncMenu }: Pro
         <SyncToFilesystemSetting
           value={{ filePath: workspaceMeta.settingSyncDir }}
           forceOpen={openSyncMenu}
+          onCreateNewWorkspace={hide}
           onChange={({ filePath }) => {
             upsertWorkspaceMeta.mutate({ ...workspaceMeta, settingSyncDir: filePath });
           }}