diff --git a/tools/export/gcc_arm_common.tmpl b/tools/export/gcc_arm_common.tmpl
index 6b23dd5bca..db5c9cb92a 100644
--- a/tools/export/gcc_arm_common.tmpl
+++ b/tools/export/gcc_arm_common.tmpl
@@ -2,18 +2,19 @@
 # see http://mbed.org/handbook/Exporting-to-GCC-ARM-Embedded
 
 # cross-platform directory manipulation
-ifeq ($(OSTYPE),)
+ifeq ($(shell echo $$OS),$$OS)
     MAKEDIR = if not exist "$(1)" mkdir "$(1)"
-    RM = rmdir /S /Q
+    RM = rmdir /S /Q "$(1)"
 else
-    MAKEDIR = mkdir -p $(1)
-    RM = rm -rf
+    MAKEDIR = $(SHELL) -c "mkdir -p \"$(1)\""
+    RM = $(SHELL) -c "rm -rf \"$(1)\""
 endif
 
 ifeq (,$(filter .build,$(notdir $(CURDIR))))
 .SUFFIXES:
 OBJDIR := .build
-MAKETARGET = $(MAKE) --no-print-directory -C $(OBJDIR) -f $(CURDIR)/Makefile \
+mkfile_path := $(abspath $(lastword $(MAKEFILE_LIST)))
+MAKETARGET = $(MAKE) --no-print-directory -C $(OBJDIR) -f $(mkfile_path) \
 		SRCDIR=$(CURDIR) $(MAKECMDGOALS)
 .PHONY: $(OBJDIR) clean
 all:
@@ -23,19 +24,19 @@ $(OBJDIR): all
 Makefile : ;
 % :: $(OBJDIR) ; :
 clean :
-	$(RM) $(OBJDIR)
+	$(call RM,$(OBJDIR))
 {% block target_clean -%}
 {% endblock %}
 else
 
-VPATH = $(SRCDIR)
+VPATH = {% for path in vpath %}{{path}} {% endfor %}
 
 GCC_BIN = 
 PROJECT = {{name}}
 OBJECTS = {% for f in to_be_compiled %}{{f}} {% endfor %}
 SYS_OBJECTS = {% for f in object_files %}{{f}} {% endfor %}
-INCLUDE_PATHS = {% for p in include_paths %}-I../{{p}} {% endfor %}
-LIBRARY_PATHS = {% for p in library_paths %}-L../{{p}} {% endfor %}
+INCLUDE_PATHS = {% for p in include_paths %}-I{{p}} {% endfor %}
+LIBRARY_PATHS = {% for p in library_paths %}-L{{p}} {% endfor %}
 LIBRARIES = {% for lib in libraries %}-l{{lib}} {% endfor %}
 LINKER_SCRIPT = {{linker_script}}
 {%- block additional_variables -%}{% endblock %}
diff --git a/tools/export/gccarm.py b/tools/export/gccarm.py
index 28d9c90a87..88efe21b59 100644
--- a/tools/export/gccarm.py
+++ b/tools/export/gccarm.py
@@ -15,8 +15,8 @@ See the License for the specific language governing permissions and
 limitations under the License.
 """
 from exporters import Exporter
-from os.path import splitext, basename
-from os import curdir
+from os.path import splitext, basename, relpath, join, abspath
+from os import curdir, getcwd
 
 
 class GccArm(Exporter):
@@ -132,8 +132,9 @@ class GccArm(Exporter):
 
     def generate(self):
         # "make" wants Unix paths
+        if self.sources_relative:
+            self.resources.relative_to(self.prj_paths[0])
         self.resources.win_to_unix()
-        self.resources.relative_to(curdir)
 
         to_be_compiled = []
         for r_type in ['s_sources', 'c_sources', 'cpp_sources']:
@@ -148,6 +149,7 @@ class GccArm(Exporter):
             l, _ = splitext(basename(lib))
             libraries.append(l[3:])
 
+        build_dir = abspath(join(self.inputDir, ".build"))
         ctx = {
             'name': self.program_name,
             'to_be_compiled': to_be_compiled,
@@ -157,7 +159,20 @@ class GccArm(Exporter):
             'linker_script': self.resources.linker_script,
             'libraries': libraries,
             'symbols': self.get_symbols(),
-            'cpu_flags': self.toolchain.cpu
+            'cpu_flags': self.toolchain.cpu,
+            'vpath': [relpath(s, build_dir) for s in self.prj_paths] if self.sources_relative else [".."]
         }
+
+        for key in ['include_paths', 'library_paths', 'linker_script']:
+            if isinstance(ctx[key], list):
+                ctx[key] = [ctx['vpath'][0] + "/" + t for t in ctx[key]]
+            else:
+                ctx[key] = ctx['vpath'][0] + "/" + ctx[key]
+        if "../." not in ctx["include_paths"]:
+            ctx["include_paths"] += ['../.']
         ctx.update(self.progen_flags)
         self.gen_file('gcc_arm_%s.tmpl' % self.target.lower(), ctx, 'Makefile')
+
+    def scan_and_copy_resources(self, prj_paths, trg_path, relative=False):
+        self.prj_paths = prj_paths
+        Exporter.scan_and_copy_resources(self, prj_paths, trg_path, relative)
diff --git a/tools/toolchains/__init__.py b/tools/toolchains/__init__.py
index 20f1460cb3..5595294506 100644
--- a/tools/toolchains/__init__.py
+++ b/tools/toolchains/__init__.py
@@ -147,7 +147,7 @@ class Resources:
             v = [rel_path(f, base, dot) for f in getattr(self, field)]
             setattr(self, field, v)
 
-        self.features = {k: f.relative_to(base, dot) for k, f in self.features.iteritems()}
+        self.features = {k: f.relative_to(base, dot) for k, f in self.features.iteritems() if f}
 
         if self.linker_script is not None:
             self.linker_script = rel_path(self.linker_script, base, dot)
@@ -160,7 +160,7 @@ class Resources:
             v = [f.replace('\\', '/') for f in getattr(self, field)]
             setattr(self, field, v)
 
-        self.features = {k: f.win_to_unix() for k, f in self.features.iteritems()}
+        self.features = {k: f.win_to_unix() for k, f in self.features.iteritems() if f}
 
         if self.linker_script is not None:
             self.linker_script = self.linker_script.replace('\\', '/')