diff --git a/src/AXSharp.compiler/src/AXSharp.Compiler/AxProject.cs b/src/AXSharp.compiler/src/AXSharp.Compiler/AxProject.cs
index 85984103..ef90f789 100644
--- a/src/AXSharp.compiler/src/AXSharp.Compiler/AxProject.cs
+++ b/src/AXSharp.compiler/src/AXSharp.Compiler/AxProject.cs
@@ -117,9 +117,19 @@ private static string GetStartDirectory(string givenDirectory, int levelsUp)
                 if (dirInfo.Parent != null)
                 {
                     dirInfo = dirInfo.Parent;
+                    var potentialapax = dirInfo.GetFiles().Where(p => p.Name == "apax.yml").FirstOrDefault();
+                    if (potentialapax != null)
+                    {
+                        var apax = Apax.CreateApaxDto(potentialapax.FullName);
+                        if (apax.Type == "workspace")
+                        {
+                            return dirInfo.FullName;
+                        }
+                    }
                 }
                 else
                 {
+                    Log.Logger.Information("Workspace apax file was not located in the directory structure, project references won't be compiled.");
                     return dirInfo.FullName; // Return root if we hit it before moving the desired levels up
                 }
             }
@@ -232,7 +242,7 @@ private IEnumerable<object> GetProjectDependencies()
                     ApaxFile = new FileInfo(Path.Combine(p, "apax.yml"))
                 }).ToList();
 
-        nearByProjects = SearchForApaxFiles(GetStartDirectory(this.ProjectFolder, 2), 0, 4)
+        nearByProjects = SearchForApaxFiles(GetStartDirectory(this.ProjectFolder, 4), 0, 4)
             .Select(p => new FileInfo(p))
             .Where(p => !p.Directory.FullName.Contains(".apax"))
             .Select(a => new NearByProjects() { Apax = Apax.TryCreateApaxDto(a.FullName), ApaxFile = a })
diff --git a/src/AXSharp.compiler/src/ixc/Properties/launchSettings.json b/src/AXSharp.compiler/src/ixc/Properties/launchSettings.json
index 7c0560bf..15ad3173 100644
--- a/src/AXSharp.compiler/src/ixc/Properties/launchSettings.json
+++ b/src/AXSharp.compiler/src/ixc/Properties/launchSettings.json
@@ -10,7 +10,7 @@
     },
     "ixc-simple-template": {
       "commandName": "Project",      
-      "workingDirectory": "c:\\W\\Develop\\gh\\ix-ax\\_axopen\\axopen.template.simple\\ax"
+      "workingDirectory": "c:\\W\\Develop\\gh\\ix-ax\\_axopen\\axopen.templates\\axopen.template.simple\\ax"
     },
     "ixc-template-ref": {
       "commandName": "Project",