diff --git a/YaLibs/YaToolsIDALib/Repository.cpp b/YaLibs/YaToolsIDALib/Repository.cpp
index f3cddc8d..e11142b8 100644
--- a/YaLibs/YaToolsIDALib/Repository.cpp
+++ b/YaLibs/YaToolsIDALib/Repository.cpp
@@ -47,12 +47,6 @@ namespace
     const int    GIT_PUSH_RETRIES = 3;
 
 
-    bool is_git_working_dir(const std::string& path)
-    {
-        std::error_code ec;
-        return fs::is_directory(path + "/.git", ec) && !ec;
-    }
-
     bool is_valid_xml_file(const std::string& filename)
     {
         std::shared_ptr<xmlTextReader> reader(xmlReaderForFile(filename.c_str(), NULL, 0), &xmlFreeTextReader);
@@ -256,8 +250,7 @@ Repository::Repository(const std::string& path)
     : repo_auto_sync_(true)
     , include_idb_(false)
 {
-    // check git working directory before creating repo
-    const bool repo_already_exists = is_git_working_dir(path);
+    const bool repo_already_exists = is_git_directory(path);
 
     git_ = MakeGit(path);
     if(!git_)
@@ -273,10 +266,10 @@ Repository::Repository(const std::string& path)
         LOG(DEBUG, "Repo opened\n");
         return;
     }
-    LOG(INFO, "Repo created\n");
 
     include_idb_ = ask_for_idb_tracking();
     LOG(INFO, "%s %s\n", include_idb_ ? "tracking" : "ignoring", get_original_idb_name().data());
+    LOG(INFO, "Repo created\n");
 
     // add .gitignore to repo
     const auto gitignore = fs::path(get_current_idb_path()).replace_filename(".gitignore");
diff --git a/YaLibs/YaToolsLib/Git.cpp b/YaLibs/YaToolsLib/Git.cpp
index d5199b58..9c963fe3 100644
--- a/YaLibs/YaToolsLib/Git.cpp
+++ b/YaLibs/YaToolsLib/Git.cpp
@@ -140,14 +140,15 @@ namespace
 
     std::shared_ptr<IGit> init(const std::string& path, Git::ECloneMode emode)
     {
-        const auto fullpath = fs::canonical(fs::absolute(path));
+        const auto fullpath = fs::absolute(path);
         git_repository* ptr_repo = nullptr;
         auto err = git_repository_init(&ptr_repo, fullpath.generic_string().data(), emode == Git::CLONE_BARE);
         if(err != GIT_OK)
-            FAIL_WITH(std::nullptr_t(), "unable to initialize %srepository at %s", emode == Git::CLONE_BARE ? "bare " : "", fullpath.generic_string().data());
+            err = git_repository_open(&ptr_repo, fullpath.string().data());
+        if(err != GIT_OK)
+            FAIL_WITH(std::nullptr_t(), "unable to open git repository at %s", fullpath.generic_string().data());
 
-        auto repo = make_unique(ptr_repo);
-        return std::make_shared<Git>(path, std::move(repo));
+        return std::make_shared<Git>(path, std::move(make_unique(ptr_repo)));
     }
 }
 
@@ -161,6 +162,15 @@ std::shared_ptr<IGit> MakeGitBare(const std::string& path)
     return init(path, Git::CLONE_BARE);
 }
 
+bool is_git_directory(const std::string& path)
+{
+    const auto fullpath = fs::absolute(path);
+    git_repository* ptr_repo = nullptr;
+    const auto err = git_repository_open(&ptr_repo, fullpath.generic_string().data());
+    const auto repo = make_unique(ptr_repo);
+    return err == GIT_OK;
+}
+
 Git::Git(const std::string& path, std::unique_ptr<git_repository>&& repo)
     : path_(path)
     , repo_(std::move(repo))
diff --git a/YaLibs/YaToolsLib/Git.hpp b/YaLibs/YaToolsLib/Git.hpp
index b8c2f384..dac3bbea 100644
--- a/YaLibs/YaToolsLib/Git.hpp
+++ b/YaLibs/YaToolsLib/Git.hpp
@@ -65,5 +65,6 @@ struct IGit
 std::shared_ptr<IGit> MakeGit       (const std::string& path);
 std::shared_ptr<IGit> MakeGitBare   (const std::string& path);
 
+bool        is_git_directory(const std::string& path);
 std::string diff_strings (const const_string_ref& left, const char* leftname, const const_string_ref& right, const char* rightname);
 std::string merge_strings(const const_string_ref& left, const char* leftname, const const_string_ref& right, const char* rightname);
\ No newline at end of file
diff --git a/tests/tests/test_git.py b/tests/tests/test_git.py
index e42576c1..fcd9e370 100644
--- a/tests/tests/test_git.py
+++ b/tests/tests/test_git.py
@@ -37,3 +37,38 @@ def test_invalid_git(self):
         a.run(
             self.script("idc.AddEnum(-1, 'name', idaapi.hexflag())"),
         )
+
+    def test_git_submodule(self):
+        a, b = self.setup_repos()
+
+        # setup git repo 'd' containing submodule 'a' at path 'modules/z'
+        d = os.path.abspath(os.path.join(a.path, "..", "d"))
+        os.makedirs(os.path.join(d, "modules"))
+        runtests.sysexec(d, ["git", "init"])
+        with open(os.path.join(d, "modules", ".gitignore"), "wb") as fh:
+            fh.write("dummy file")
+        runtests.sysexec(d, ["git", "add", "-A"])
+        runtests.sysexec(d, ["git", "commit", "-m", "init"])
+        runtests.sysexec(d, ["git", "submodule", "add", "../c", "modules/z"])
+
+        # 'e' now contains our submodule
+        target = "Qt5Svgd.dll"
+        pe = os.path.abspath(os.path.join(d, "modules", "z"))
+        e = runtests.Repo(self, pe, target)
+
+        # initialize YaCo
+        e.run_script("""
+import yaco_plugin
+yaco_plugin.start()
+""", target=target + ".i64")
+
+        # check changes are properly propagated
+        e.run(
+            self.script("idaapi.add_enum(idaapi.BADADDR, 'name_a', idaapi.hexflag())"),
+            self.save_enum("name_a"),
+        )
+        e.check_git(added=["enum"])
+
+        a.run(
+            self.check_enum("name_a"),
+        )