diff --git a/py/compile.c b/py/compile.c
index e90b366e0e..e708bde8e0 100644
--- a/py/compile.c
+++ b/py/compile.c
@@ -1196,7 +1196,8 @@ STATIC void compile_declare_global(compiler_t *comp, mp_parse_node_t pn, qstr qs
 
 STATIC void compile_declare_nonlocal(compiler_t *comp, mp_parse_node_t pn, qstr qst, bool added, id_info_t *id_info) {
     if (added) {
-        scope_find_local_and_close_over(comp->scope_cur, id_info, qst);
+        id_info->kind = ID_INFO_KIND_GLOBAL_IMPLICIT;
+        scope_check_to_close_over(comp->scope_cur, id_info);
         if (id_info->kind == ID_INFO_KIND_GLOBAL_IMPLICIT) {
             compile_syntax_error(comp, pn, "no binding for nonlocal found");
         }
@@ -3391,6 +3392,14 @@ mp_raw_code_t *mp_compile_to_raw_code(mp_parse_tree_t *parse_tree, qstr source_f
         #endif
         } else {
             compile_scope(comp, s, MP_PASS_SCOPE);
+
+            // Check if any implicitly declared variables should be closed over
+            for (size_t i = 0; i < s->id_info_len; ++i) {
+                id_info_t *id = &s->id_info[i];
+                if (id->kind == ID_INFO_KIND_GLOBAL_IMPLICIT) {
+                    scope_check_to_close_over(s, id);
+                }
+            }
         }
 
         // update maximim number of labels needed
diff --git a/py/emitcommon.c b/py/emitcommon.c
index 89cc2c9597..149e0b0f1f 100644
--- a/py/emitcommon.c
+++ b/py/emitcommon.c
@@ -35,7 +35,7 @@ void mp_emit_common_get_id_for_load(scope_t *scope, qstr qst) {
     bool added;
     id_info_t *id = scope_find_or_add_id(scope, qst, &added);
     if (added) {
-        scope_find_local_and_close_over(scope, id, qst);
+        id->kind = ID_INFO_KIND_GLOBAL_IMPLICIT;
     }
 }
 
diff --git a/py/scope.c b/py/scope.c
index 1a6ae7b8ad..8adb85b80f 100644
--- a/py/scope.c
+++ b/py/scope.c
@@ -130,21 +130,19 @@ STATIC void scope_close_over_in_parents(scope_t *scope, qstr qst) {
     }
 }
 
-void scope_find_local_and_close_over(scope_t *scope, id_info_t *id, qstr qst) {
+void scope_check_to_close_over(scope_t *scope, id_info_t *id) {
     if (scope->parent != NULL) {
         for (scope_t *s = scope->parent; s->parent != NULL; s = s->parent) {
-            id_info_t *id2 = scope_find(s, qst);
+            id_info_t *id2 = scope_find(s, id->qst);
             if (id2 != NULL) {
                 if (id2->kind == ID_INFO_KIND_LOCAL || id2->kind == ID_INFO_KIND_CELL || id2->kind == ID_INFO_KIND_FREE) {
                     id->kind = ID_INFO_KIND_FREE;
-                    scope_close_over_in_parents(scope, qst);
-                    return;
+                    scope_close_over_in_parents(scope, id->qst);
                 }
                 break;
             }
         }
     }
-    id->kind = ID_INFO_KIND_GLOBAL_IMPLICIT;
 }
 
 #endif // MICROPY_ENABLE_COMPILER
diff --git a/py/scope.h b/py/scope.h
index 5e9a0eb7b2..d51bb90bbf 100644
--- a/py/scope.h
+++ b/py/scope.h
@@ -93,6 +93,6 @@ void scope_free(scope_t *scope);
 id_info_t *scope_find_or_add_id(scope_t *scope, qstr qstr, bool *added);
 id_info_t *scope_find(scope_t *scope, qstr qstr);
 id_info_t *scope_find_global(scope_t *scope, qstr qstr);
-void scope_find_local_and_close_over(scope_t *scope, id_info_t *id, qstr qst);
+void scope_check_to_close_over(scope_t *scope, id_info_t *id);
 
 #endif // MICROPY_INCLUDED_PY_SCOPE_H
diff --git a/tests/basics/scope_implicit.py b/tests/basics/scope_implicit.py
new file mode 100644
index 0000000000..aecda77156
--- /dev/null
+++ b/tests/basics/scope_implicit.py
@@ -0,0 +1,31 @@
+# test implicit scoping rules
+
+# implicit nonlocal, with variable defined after closure
+def f():
+    def g():
+        return x # implicit nonlocal
+    x = 3 # variable defined after function that closes over it
+    return g
+print(f()())
+
+# implicit nonlocal at inner level, with variable defined after closure
+def f():
+    def g():
+        def h():
+            return x # implicit nonlocal
+        return h
+    x = 4 # variable defined after function that closes over it
+    return g
+print(f()()())
+
+# local variable which should not be implicitly made nonlocal
+def f():
+    x = 0
+    def g():
+        x # local because next statement assigns to it
+        x = 1
+    g()
+try:
+    f()
+except NameError:
+    print('NameError')
diff --git a/tests/run-tests b/tests/run-tests
index d72ae9dc4a..62af90f28c 100755
--- a/tests/run-tests
+++ b/tests/run-tests
@@ -358,6 +358,7 @@ def run_tests(pyb, tests, args, base_path="."):
         skip_tests.add('basics/del_deref.py') # requires checking for unbound local
         skip_tests.add('basics/del_local.py') # requires checking for unbound local
         skip_tests.add('basics/exception_chain.py') # raise from is not supported
+        skip_tests.add('basics/scope_implicit.py') # requires checking for unbound local
         skip_tests.add('basics/try_finally_return2.py') # requires raise_varargs
         skip_tests.add('basics/unboundlocal.py') # requires checking for unbound local
         skip_tests.add('misc/features.py') # requires raise_varargs