diff --git a/.gitignore b/.gitignore
index 2c877a4d02c..5e155e2ecab 100644
--- a/.gitignore
+++ b/.gitignore
@@ -30,6 +30,7 @@ tooling/noir_js/lib
 **/target
 !test_programs/acir_artifacts/*/target
 !test_programs/acir_artifacts/*/target/witness.gz
+!test_programs/compile_success_empty/workspace_usually_gitignored/bin/Verifier.toml
 !compiler/wasm/noir-script/target
 
 gates_report.json
diff --git a/test_programs/compile_failure/missing_nargo_toml/this_package_is_missing_a_Nargo.toml b/test_programs/compile_failure/missing_nargo_toml/this_package_is_missing_a_Nargo.toml
new file mode 100644
index 00000000000..e69de29bb2d
diff --git a/test_programs/compile_success_empty/workspace_usually_gitignored/bin/Verifier.toml b/test_programs/compile_success_empty/workspace_usually_gitignored/bin/Verifier.toml
new file mode 100644
index 00000000000..e228b8a4bf1
--- /dev/null
+++ b/test_programs/compile_success_empty/workspace_usually_gitignored/bin/Verifier.toml
@@ -0,0 +1 @@
+return = ""
diff --git a/tooling/nargo_cli/Cargo.toml b/tooling/nargo_cli/Cargo.toml
index c20be037e62..15d94735008 100644
--- a/tooling/nargo_cli/Cargo.toml
+++ b/tooling/nargo_cli/Cargo.toml
@@ -17,6 +17,7 @@ path = "src/main.rs"
 
 [build-dependencies]
 build-data.workspace = true
+nargo_toml.workspace = true
 toml.workspace = true
 
 [dependencies]
diff --git a/tooling/nargo_cli/build.rs b/tooling/nargo_cli/build.rs
index 0ed2d4c07f7..1f478fbe3f8 100644
--- a/tooling/nargo_cli/build.rs
+++ b/tooling/nargo_cli/build.rs
@@ -3,6 +3,8 @@ use std::io::Write;
 use std::path::{Path, PathBuf};
 use std::{env, fs};
 
+use nargo_toml::{find_package_root, ManifestError};
+
 const GIT_COMMIT: &&str = &"GIT_COMMIT";
 
 fn main() {
@@ -230,6 +232,11 @@ fn compile_success_empty_{test_name}() {{
         panic!("`nargo info` failed with: {{}}", String::from_utf8(output.stderr).unwrap_or_default());
     }}
 
+    // skip empty test packages
+    if std::str::from_utf8(&output.stdout).unwrap_or("").contains("cannot find any files visible to git at the following path") {{
+        return ()
+    }}
+
     // `compile_success_empty` tests should be able to compile down to an empty circuit.
     let json: serde_json::Value = serde_json::from_slice(&output.stdout).unwrap_or_else(|e| {{
         panic!("JSON was not well-formatted {{:?}}\n\n{{:?}}", e, std::str::from_utf8(&output.stdout))
@@ -299,6 +306,16 @@ fn generate_compile_failure_tests(test_file: &mut File, test_data_dir: &Path) {
         };
         let test_dir = &test_dir.path();
 
+        match find_package_root(test_dir) {
+            Ok(_) => (),
+            Err(err) => {
+                // avoid testing when there are no files in the test_dir
+                return if matches!(err, ManifestError::InvisibleToGit(..)) {
+                    continue;
+                };
+            }
+        }
+
         write!(
             test_file,
             r#"
diff --git a/tooling/nargo_cli/src/cli/mod.rs b/tooling/nargo_cli/src/cli/mod.rs
index ad778549ac0..2c1855b2c5f 100644
--- a/tooling/nargo_cli/src/cli/mod.rs
+++ b/tooling/nargo_cli/src/cli/mod.rs
@@ -1,6 +1,6 @@
 use clap::{Args, Parser, Subcommand};
 use const_format::formatcp;
-use nargo_toml::find_package_root;
+use nargo_toml::{find_package_root, ManifestError};
 use noirc_driver::NOIR_ARTIFACT_VERSION_STRING;
 use std::path::PathBuf;
 
@@ -100,7 +100,18 @@ pub(crate) fn start_cli() -> eyre::Result<()> {
             | NargoCommand::Backend(_)
             | NargoCommand::Dap(_)
     ) {
-        config.program_dir = find_package_root(&config.program_dir)?;
+        match find_package_root(&config.program_dir) {
+            Ok(program_dir) => config.program_dir = program_dir,
+            Err(err) => {
+                // avoid erroring when there are no files in the program_dir
+                return if matches!(err, ManifestError::InvisibleToGit(..)) {
+                    println!("{}", err);
+                    Ok(())
+                } else {
+                    Err(err.into())
+                };
+            }
+        }
     }
 
     let active_backend = get_active_backend();
diff --git a/tooling/nargo_toml/src/errors.rs b/tooling/nargo_toml/src/errors.rs
index 77fe77bcdbb..8e0abf0a4c5 100644
--- a/tooling/nargo_toml/src/errors.rs
+++ b/tooling/nargo_toml/src/errors.rs
@@ -12,6 +12,10 @@ pub enum ManifestError {
     #[error("cannot find a Nargo.toml for {0}")]
     MissingFile(PathBuf),
 
+    /// Package doesn't contain any files that are visible to git
+    #[error("cannot find any files visible to git at the following path (skipping): {0}")]
+    InvisibleToGit(PathBuf),
+
     #[error("Cannot read file {0} - does it exist?")]
     ReadFailed(PathBuf),
 
diff --git a/tooling/nargo_toml/src/lib.rs b/tooling/nargo_toml/src/lib.rs
index 985cb30dc24..d7c7f37b941 100644
--- a/tooling/nargo_toml/src/lib.rs
+++ b/tooling/nargo_toml/src/lib.rs
@@ -5,6 +5,7 @@
 
 use std::{
     collections::BTreeMap,
+    ffi::OsStr,
     path::{Component, Path, PathBuf},
 };
 
@@ -92,7 +93,13 @@ pub fn find_package_manifest(
         }
 
         // Return the shallowest Nargo.toml, which will be the last in the list
-        found_toml_paths.pop().ok_or_else(|| ManifestError::MissingFile(current_path.to_path_buf()))
+        found_toml_paths.pop().ok_or_else(|| {
+            if is_package_visible_to_git(current_path) {
+                ManifestError::MissingFile(current_path.to_path_buf())
+            } else {
+                ManifestError::InvisibleToGit(current_path.to_path_buf())
+            }
+        })
     } else {
         Err(ManifestError::NoCommonAncestor {
             root: root_path.to_path_buf(),
@@ -100,6 +107,33 @@ pub fn find_package_manifest(
         })
     }
 }
+
+/// Check whether the given path is visible to git.
+/// A package can become invisible to git when its visible contents are deleted,
+/// but its folders remain, as can happen from git merges.
+fn is_package_visible_to_git(current_path: &Path) -> bool {
+    if current_path.is_file() {
+        // **/Verifier.toml
+        if current_path.file_name() != Some(OsStr::new("Verifier.toml")) {
+            return true;
+        }
+    } else {
+        // **/target
+        // !test_programs/acir_artifacts/*/target
+        if current_path.file_name() == Some(OsStr::new("target")) {
+            return current_path.to_str().unwrap_or("").contains("acir_artifacts");
+        }
+
+        for sub_path_entry in current_path.read_dir().expect("path to exist during compilation") {
+            let sub_path = sub_path_entry.expect("path to exist during compilation").path();
+            if is_package_visible_to_git(&sub_path) {
+                return true;
+            }
+        }
+    }
+    false
+}
+
 /// Returns the [PathBuf] of the `Nargo.toml` file in the `current_path` directory.
 ///
 /// Returns a [ManifestError] if `current_path` does not contain a manifest file.