diff --git a/packages/node-dev/package.json b/packages/node-dev/package.json
index 7a17ea6b7e..c839a67326 100644
--- a/packages/node-dev/package.json
+++ b/packages/node-dev/package.json
@@ -46,6 +46,7 @@
         "@oclif/dev-cli": "^1.22.2",
         "@types/inquirer": "^6.5.0",
         "@types/node": "^10.10.1",
+        "@types/tmp": "^0.1.0",
         "@types/vorpal": "^1.11.0",
         "tslint": "^5.17.0"
     },
@@ -58,6 +59,7 @@
         "n8n-workflow": "^0.11.0",
         "replace-in-file": "^4.1.0",
         "request": "^2.88.0",
+        "tmp-promise": "^2.0.2",
         "typescript": "~3.5.2"
     },
     "jest": {
diff --git a/packages/node-dev/src/Build.ts b/packages/node-dev/src/Build.ts
index 4758926222..b898ac05fd 100644
--- a/packages/node-dev/src/Build.ts
+++ b/packages/node-dev/src/Build.ts
@@ -1,5 +1,14 @@
-import { join } from 'path';
 import { ChildProcess, spawn } from 'child_process';
+import {
+	readFile as fsReadFile,
+	write as fsWrite,
+} from 'fs';
+import { join } from 'path';
+import { file } from 'tmp-promise';
+import { promisify } from 'util';
+
+const fsReadFileAsync = promisify(fsReadFile);
+const fsWriteAsync = promisify(fsWrite);
 
 import { IBuildOptions } from '.';
 
@@ -8,6 +17,41 @@ import {
 } from 'n8n-core';
 
 
+/**
+ * Create a custom tsconfig file as tsc currently has no way to define a base
+ * directory:
+ * https://github.com/Microsoft/TypeScript/issues/25430
+ *
+ * @export
+ * @returns
+ */
+export async function createCustomTsconfig () {
+
+	// Get path to simple tsconfig file which should be used for build
+	const tsconfigPath = join(__dirname, '../../src/tsconfig-build.json');
+
+	// Read the tsconfi file
+	const tsConfigString = await fsReadFileAsync(tsconfigPath, { encoding: 'utf8'}) as string;
+	const tsConfig = JSON.parse(tsConfigString);
+
+	// Set absolute include paths
+	const newIncludeFiles = [];
+	for (const includeFile of tsConfig.include) {
+		newIncludeFiles.push(join(process.cwd(), includeFile));
+	}
+	tsConfig.include = newIncludeFiles;
+
+	// Write new custom tsconfig file
+	const { fd, path, cleanup } = await file();
+	await fsWriteAsync(fd, Buffer.from(JSON.stringify(tsConfig, null, 2), 'utf8'));
+
+	return {
+		path,
+		cleanup,
+	};
+}
+
+
 /**
  * Builds and copies credentials and nodes
  *
@@ -21,12 +65,11 @@ export async function buildFiles (options?: IBuildOptions): Promise<string> {
 	// Get the path of the TypeScript cli of this project
 	const tscPath = join(__dirname, '../../node_modules/typescript/bin/tsc');
 
-	// Get path to simple tsconfig file which should be used for build
-	const tsconfigPath = join(__dirname, '../../src/tsconfig-build.json');
+	const tsconfigData = await createCustomTsconfig();
 
 	const outputDirectory = options.destinationFolder || UserSettings.getUserN8nFolderCustomExtensionPath();
 
-	let buildCommand = `${tscPath} --p ${tsconfigPath} --outDir ${outputDirectory}`;
+	let buildCommand = `${tscPath} --p ${tsconfigData.path} --outDir ${outputDirectory} --rootDir ${process.cwd()}`;
 	if (options.watch === true) {
 		buildCommand += ' --watch';
 	}
@@ -52,11 +95,16 @@ export async function buildFiles (options?: IBuildOptions): Promise<string> {
 			errorMessage = `${errorMessage}\nGot following output:\n${error.stdout}`;
 		}
 
+		// Remove the tmp tsconfig file
+		tsconfigData.cleanup();
+
 		throw new Error(errorMessage);
 	}
 
 	return new Promise((resolve, reject) => {
 		buildProcess.on('exit', code => {
+			// Remove the tmp tsconfig file
+			tsconfigData.cleanup();
 			resolve(outputDirectory);
 		});
 	});
diff --git a/packages/node-dev/src/tsconfig-build.json b/packages/node-dev/src/tsconfig-build.json
index cb48078fac..d21e9bddd4 100644
--- a/packages/node-dev/src/tsconfig-build.json
+++ b/packages/node-dev/src/tsconfig-build.json
@@ -3,9 +3,7 @@
 		"lib": [
 			"es2017"
 		],
-		"types": [
-			"node"
-		],
+		"types": [],
 		"module": "commonjs",
 		"importHelpers": true,
 		"noImplicitAny": true,
@@ -18,8 +16,8 @@
 		"sourceMap": true
 	},
 	"include": [
-		"../*.credentials.ts",
-		"../*.node.ts"
+		"*.credentials.ts",
+		"*.node.ts"
 	],
 	"exclude": [
 		"node_modules"