diff --git a/mdl/executor/cmd_microflows_create.go b/mdl/executor/cmd_microflows_create.go
index 96d6de1d..7485407d 100644
--- a/mdl/executor/cmd_microflows_create.go
+++ b/mdl/executor/cmd_microflows_create.go
@@ -13,6 +13,14 @@ import (
 	"github.com/mendixlabs/mxcli/sdk/mpr"
 )
 
+// isBuiltinModuleEntity returns true for modules whose entities are defined
+// internally by the Mendix runtime and are therefore not present in the MPR's
+// domain models. These types are serialized using the qualified name reference
+// ("System.Workflow", "System.User", etc.) and resolved at runtime.
+func isBuiltinModuleEntity(moduleName string) bool {
+	return moduleName == "System"
+}
+
 // execCreateMicroflow handles CREATE MICROFLOW statements.
 func (e *Executor) execCreateMicroflow(s *ast.CreateMicroflowStmt) error {
 	if e.writer == nil {
@@ -105,8 +113,10 @@ func (e *Executor) execCreateMicroflow(s *ast.CreateMicroflowStmt) error {
 
 	// Validate and add parameters
 	for _, p := range s.Parameters {
-		// Validate entity references for List and Entity types
-		if p.Type.EntityRef != nil {
+		// Validate entity references for List and Entity types.
+		// Built-in modules (e.g. System) are not stored in the MPR domain models;
+		// their types are serialized by qualified name and resolved at runtime.
+		if p.Type.EntityRef != nil && !isBuiltinModuleEntity(p.Type.EntityRef.Module) {
 			entityID := entityResolver(*p.Type.EntityRef)
 			if entityID == "" {
 				return fmt.Errorf("entity '%s.%s' not found for parameter '%s'",
@@ -133,8 +143,10 @@ func (e *Executor) execCreateMicroflow(s *ast.CreateMicroflowStmt) error {
 
 	// Validate and set return type
 	if s.ReturnType != nil {
-		// Validate entity references for return type
-		if s.ReturnType.Type.EntityRef != nil {
+		// Validate entity references for return type.
+		// Built-in modules (e.g. System) are not stored in the MPR domain models;
+		// their types are serialized by qualified name and resolved at runtime.
+		if s.ReturnType.Type.EntityRef != nil && !isBuiltinModuleEntity(s.ReturnType.Type.EntityRef.Module) {
 			entityID := entityResolver(*s.ReturnType.Type.EntityRef)
 			if entityID == "" {
 				return fmt.Errorf("entity '%s.%s' not found for return type",
diff --git a/mdl/executor/cmd_microflows_format_action.go b/mdl/executor/cmd_microflows_format_action.go
index 626120b7..d03c0e08 100644
--- a/mdl/executor/cmd_microflows_format_action.go
+++ b/mdl/executor/cmd_microflows_format_action.go
@@ -23,8 +23,8 @@ func (e *Executor) formatActivity(
 
 	case *microflows.EndEvent:
 		if activity.ReturnValue != "" {
-			returnVal := activity.ReturnValue
-			if !strings.HasPrefix(returnVal, "$") {
+			returnVal := strings.TrimSuffix(activity.ReturnValue, "\n")
+			if !strings.HasPrefix(returnVal, "$") && !isMendixKeyword(returnVal) {
 				returnVal = "$" + returnVal
 			}
 			return fmt.Sprintf("RETURN %s;", returnVal)
@@ -846,3 +846,13 @@ func (e *Executor) formatExecuteDatabaseQueryAction(a *microflows.ExecuteDatabas
 	sb.WriteString(";")
 	return sb.String()
 }
+
+// isMendixKeyword returns true for Mendix expression keywords that must not be
+// prefixed with "$" when serialized as a RETURN value.
+func isMendixKeyword(s string) bool {
+	switch s {
+	case "empty", "true", "false", "null":
+		return true
+	}
+	return false
+}
diff --git a/mdl/executor/roundtrip_microflow_test.go b/mdl/executor/roundtrip_microflow_test.go
index 798559d3..2af290ed 100644
--- a/mdl/executor/roundtrip_microflow_test.go
+++ b/mdl/executor/roundtrip_microflow_test.go
@@ -583,6 +583,32 @@ END;`
 	)
 }
 
+// TestRoundtripMicroflow_SystemEntityParameter tests that microflows with
+// System.* built-in entity parameter types can be created (issue #29).
+// System entities (System.Workflow, System.User, etc.) are not stored in the
+// MPR domain models — they are serialized by qualified name at runtime.
+func TestRoundtripMicroflow_SystemEntityParameter(t *testing.T) {
+	env := setupTestEnv(t)
+	defer env.teardown()
+
+	mfName := testModule + ".RT_SystemEntityParam"
+	env.registerCleanup("microflow", mfName)
+
+	createMDL := `CREATE MICROFLOW ` + mfName + ` (
+  $Workflow: System.Workflow,
+  $Count: Integer
+) RETURNS List of System.User
+BEGIN
+  RETURN empty;
+END;`
+
+	assertMicroflowContains(t, env, mfName, createMDL,
+		// "empty" is a reserved keyword — must round-trip as "RETURN empty", not "$empty"
+		[]string{"System.Workflow", "System.User", "RETURN empty"},
+		[]string{"RETURN $empty"},
+	)
+}
+
 // TestRoundtripMicroflow_Position tests @position is emitted in DESCRIBE output.
 func TestRoundtripMicroflow_Position(t *testing.T) {
 	env := setupTestEnv(t)
diff --git a/sdk/mpr/writer_microflow.go b/sdk/mpr/writer_microflow.go
index ba8a0c3d..f292b153 100644
--- a/sdk/mpr/writer_microflow.go
+++ b/sdk/mpr/writer_microflow.go
@@ -136,11 +136,9 @@ func (w *Writer) serializeMicroflow(mf *microflows.Microflow) ([]byte, error) {
 	}
 
 	// Add remaining optional fields
-	returnVarName := mf.ReturnVariableName
-	if returnVarName == "" {
-		returnVarName = "Variable" // Default value used by Mendix
-	}
-	doc = append(doc, bson.E{Key: "ReturnVariableName", Value: returnVarName})
+	// ReturnVariableName is "" by default (Studio Pro convention).
+	// Only set a custom name when explicitly specified via "RETURNS xxx AS $VarName".
+	doc = append(doc, bson.E{Key: "ReturnVariableName", Value: mf.ReturnVariableName})
 	doc = append(doc, bson.E{Key: "StableId", Value: idToBsonBinary(generateUUID())})
 	doc = append(doc, bson.E{Key: "Url", Value: ""})
 	doc = append(doc, bson.E{Key: "UrlSearchParameters", Value: bson.A{int32(1)}})
@@ -223,7 +221,7 @@ func serializeMicroflowParameter(p *microflows.MicroflowParameter, posX int) bso
 		{Key: "$Type", Value: "Microflows$MicroflowParameter"},
 		{Key: "DefaultValue", Value: ""},
 		{Key: "Documentation", Value: p.Documentation},
-		{Key: "HasVariableNameBeenChanged", Value: true},
+		{Key: "HasVariableNameBeenChanged", Value: false},
 		{Key: "IsRequired", Value: true},
 		{Key: "Name", Value: p.Name},
 		{Key: "RelativeMiddlePoint", Value: relativeMiddlePoint},