diff --git a/app/assets/javascripts/projects/index.js b/app/assets/javascripts/projects/index.js
index 1083de879..0cdf87d7a 100644
--- a/app/assets/javascripts/projects/index.js
+++ b/app/assets/javascripts/projects/index.js
@@ -42,6 +42,37 @@
   var selectedProjects = [];
   var selectedProjectFolders = [];
 
+  // Init new project folder modal function
+  function initNewProjectFolderModal() {
+    var newProjectFolderModal = '#new-project-folder-modal'
+    // Modal's submit handler function
+    function newProjectFolderModalResponse() {
+      $(newProjectFolderModal).find('form')
+        .on('ajax:success', function(ev, data) {
+          refreshCurrentView();
+          $(newProjectFolderModal).modal('hide');
+          HelperModule.flashAlertMsg(data.message, 'success');
+        })
+        .on('ajax:error', function(e, data) {
+          $(this).renderFormErrors('project_folder', data.responseJSON);
+        });
+    }
+
+    $('.new-project-folder-btn')
+      .on('ajax:success', function(e, data) {
+        // Add and show modal
+        $('body').append($.parseHTML(data.html));
+        $(newProjectFolderModal).modal('show');
+        $(newProjectFolderModal).find("input[type='text']").focus();
+        newProjectFolderModalResponse();
+
+        // Remove modal when it gets closed
+        $(newProjectFolderModal).on('hidden.bs.modal', function() {
+          $(newProjectFolderModal).remove();
+        });
+      });
+  }
+
   /**
    * Initialize the JS for new project modal to work.
    */
@@ -402,12 +433,12 @@
     exportProjectsSubmit = $('#export-projects-modal-submit');
 
     updateSelectedCards();
+    initNewProjectFolderModal();
     initNewProjectModal();
     initEditProjectModal();
     initManageUsersModal();
     initExportProjectsModal();
     initExportProjects();
-    $('.new-project-folder-btn').initSubmitModal('#new-project-folder-modal', 'project_folder');
 
     initEditProjectButton($('.panel-project'));
     initArchiveRestoreButton($('.panel-project'));
diff --git a/app/controllers/project_folders_controller.rb b/app/controllers/project_folders_controller.rb
index 166009121..74a7daf5b 100644
--- a/app/controllers/project_folders_controller.rb
+++ b/app/controllers/project_folders_controller.rb
@@ -1,6 +1,8 @@
 # frozen_string_literal: true
 
 class ProjectFoldersController < ApplicationController
+  include InputSanitizeHelper
+
   before_action :load_current_folder, only: %i(new)
   before_action :check_create_permissions, only: %i(new create)
   before_action :check_manage_permissions, only: %i(move_to)
@@ -19,19 +21,17 @@ class ProjectFoldersController < ApplicationController
   end
 
   def create
-    @project_folder = ProjectFolder.new(team: current_team)
-    @project_folder.assign_attributes(project_folders_params)
+    project_folder = current_team.project_folders.new(project_folders_params)
 
     respond_to do |format|
       format.json do
-        if @project_folder.save
+        if project_folder.save
           # log_activity()
-          flash[:success] = t('projects.index.modal_new_project_folder.success_flash',
-                              name: @project_folder.name)
-          render json: { url: project_folder_path(@project_folder) },
-                 status: :ok
+          message = t('projects.index.modal_new_project_folder.success_flash',
+                      name: escape_input(project_folder.name))
+          render json: { message: message }
         else
-          render json: @project_folder.errors,
+          render json: project_folder.errors,
                  status: :unprocessable_entity
         end
       end
@@ -58,7 +58,7 @@ class ProjectFoldersController < ApplicationController
   private
 
   def load_current_folder
-    if current_team && params[:project_folder_id].present?
+    if params[:project_folder_id].present?
       @current_folder = current_team.project_folders.find_by(id: params[:project_folder_id])
     end
   end
diff --git a/app/views/projects/index/modals/_new_project_folder.html.erb b/app/views/projects/index/modals/_new_project_folder.html.erb
index 92b0bdcca..549274b10 100644
--- a/app/views/projects/index/modals/_new_project_folder.html.erb
+++ b/app/views/projects/index/modals/_new_project_folder.html.erb
@@ -1,5 +1,5 @@
 <div class="modal" id="new-project-folder-modal" tabindex="-1" role="dialog" aria-labelledby="new-project-folder-modal-label">
-  <%= bootstrap_form_for [@project_folder], remote: true do |f| %>
+  <%= bootstrap_form_for @project_folder, remote: true do |f| %>
     <div class="modal-dialog" role="document">
       <div class="modal-content">
         <div class="modal-header">