diff --git a/gns3server/compute/qemu/qemu_vm.py b/gns3server/compute/qemu/qemu_vm.py
index b5ae36e3..078ef674 100644
--- a/gns3server/compute/qemu/qemu_vm.py
+++ b/gns3server/compute/qemu/qemu_vm.py
@@ -1680,24 +1680,14 @@ class QemuVM(BaseNode):
     async def _create_linked_clone(self, disk_name, disk_image, disk):
         try:
             qemu_img_path = self._get_qemu_img()
-            command = [qemu_img_path, "create", "-o", "backing_file={}".format(disk_image), "-f", "qcow2", disk]
-            try:
-                base_qcow2 = Qcow2(disk_image)
-                if base_qcow2.crypt_method:
-                    # Workaround for https://gitlab.com/qemu-project/qemu/-/issues/441
-                    # Also embed a secret name so it doesn't have to be passed to qemu -drive ...
-                    options = {
-                        "encrypt.key-secret": os.path.basename(disk_image),
-                        "driver": "qcow2",
-                        "file": {
-                            "driver": "file",
-                            "filename": disk_image,
-                        },
-                    }
-                    command = [qemu_img_path, "create", "-b", "json:"+json.dumps(options, separators=(',', ':')),
-                               "-f", "qcow2", "-u", disk, str(base_qcow2.size)]
-            except Qcow2Error:
-                pass  # non-qcow2 base images are acceptable (e.g. vmdk, raw image)
+            backing_options, base_qcow2 = Qcow2.backing_options(disk_image)
+            if base_qcow2 and base_qcow2.crypt_method:
+                # Workaround for https://gitlab.com/qemu-project/qemu/-/issues/441
+                # (we have to pass -u and the size).  Also embed secret name.
+                command = [qemu_img_path, "create", "-b", backing_options,
+                           "-f", "qcow2", "-u", disk, str(base_qcow2.size)]
+            else:
+                command = [qemu_img_path, "create", "-o", "backing_file={}".format(disk_image), "-f", "qcow2", disk]
 
             retcode = await self._qemu_img_exec(command)
             if retcode:
@@ -1880,10 +1870,13 @@ class QemuVM(BaseNode):
                     # create the disk
                     await self._create_linked_clone(disk_name, disk_image, disk)
                 else:
-                    # The disk exists we check if the clone works
+                    # Rebase the image. This is in case the base image moved to a different directory,
+                    # which will be the case if we imported a portable project.  This uses
+                    # get_abs_image_path(hdX_disk_image) and ignores the old base path embedded
+                    # in the qcow2 file itself.
                     try:
                         qcow2 = Qcow2(disk)
-                        await qcow2.validate(qemu_img_path)
+                        await qcow2.rebase(qemu_img_path, disk_image)
                     except (Qcow2Error, OSError) as e:
                         raise QemuError("Could not use qcow2 disk image '{}' for {}: {}".format(disk_image, disk_name, e))
 
diff --git a/gns3server/compute/qemu/utils/qcow2.py b/gns3server/compute/qemu/utils/qcow2.py
index 5a4d7979..719face0 100644
--- a/gns3server/compute/qemu/utils/qcow2.py
+++ b/gns3server/compute/qemu/utils/qcow2.py
@@ -15,6 +15,7 @@
 # You should have received a copy of the GNU General Public License
 # along with this program.  If not, see <http://www.gnu.org/licenses/>.
 
+import json
 import os
 import asyncio
 import struct
@@ -88,6 +89,35 @@ class Qcow2:
             return None
         return path
 
+    @staticmethod
+    def backing_options(base_image):
+        """
+        If the base_image is encrypted qcow2, return options for the upper layer
+        which include a secret name (equal to the basename)
+
+        :param base_image: Path to the base file (which may or may not be qcow2)
+
+        :returns: (base image string, Qcow2 object representing base image or None)
+        """
+
+        try:
+            base_qcow2 = Qcow2(base_image)
+            if base_qcow2.crypt_method:
+                # Embed a secret name so it doesn't have to be passed to qemu -drive ...
+                options = {
+                    "encrypt.key-secret": os.path.basename(base_image),
+                    "driver": "qcow2",
+                    "file": {
+                        "driver": "file",
+                        "filename": base_image,
+                    },
+                }
+                return ("json:"+json.dumps(options, separators=(',', ':')), base_qcow2)
+            else:
+                return (base_image, base_qcow2)
+        except Qcow2Error:
+            return (base_image, None)  # non-qcow2 base images are acceptable (e.g. vmdk, raw image)
+
     async def rebase(self, qemu_img, base_image):
         """
         Rebase a linked clone in order to use the correct disk
@@ -98,21 +128,10 @@ class Qcow2:
 
         if not os.path.exists(base_image):
             raise FileNotFoundError(base_image)
-        command = [qemu_img, "rebase", "-u", "-b", base_image, self._path]
+        backing_options, _ = Qcow2.backing_options(base_image)
+        command = [qemu_img, "rebase", "-u", "-b", backing_options, self._path]
         process = await asyncio.create_subprocess_exec(*command)
         retcode = await process.wait()
         if retcode != 0:
             raise Qcow2Error("Could not rebase the image")
         self._reload()
-
-    async def validate(self, qemu_img):
-        """
-        Run qemu-img info to validate the file and its backing images
-
-        :param qemu_img: Path to the qemu-img binary
-        """
-        command = [qemu_img, "info", "--backing-chain", self._path]
-        process = await asyncio.create_subprocess_exec(*command)
-        retcode = await process.wait()
-        if retcode != 0:
-            raise Qcow2Error("Could not validate the image")