diff --git a/openhands/runtime/utils/runtime_templates/Dockerfile.j2 b/openhands/runtime/utils/runtime_templates/Dockerfile.j2
index 302cdce216..f9fb596d34 100644
--- a/openhands/runtime/utils/runtime_templates/Dockerfile.j2
+++ b/openhands/runtime/utils/runtime_templates/Dockerfile.j2
@@ -71,9 +71,7 @@ RUN /openhands/micromamba/bin/micromamba create -n openhands -y && \
 RUN \
     if [ -d /openhands/code ]; then rm -rf /openhands/code; fi && \
     mkdir -p /openhands/code/openhands && \
-    touch /openhands/code/openhands/__init__.py && \
-    chmod a+rwx /openhands/code/openhands/__init__.py
-
+    touch /openhands/code/openhands/__init__.py
 COPY ./code/pyproject.toml ./code/poetry.lock /openhands/code/
 
 {{ install_dependencies() }}
@@ -89,6 +87,7 @@ COPY ./code/pyproject.toml ./code/poetry.lock /openhands/code/
 RUN if [ -d /openhands/code/openhands ]; then rm -rf /openhands/code/openhands; fi
 COPY ./code/pyproject.toml ./code/poetry.lock /openhands/code/
 COPY ./code/openhands /openhands/code/openhands
+RUN chmod a+rwx /openhands/code/openhands/__init__.py
 
 # ================================================================
 # END: Build from versioned image