diff --git a/sdk-api-kotlin-gen/build.gradle.kts b/sdk-api-kotlin-gen/build.gradle.kts
index 94b3f3a3..feb0bf08 100644
--- a/sdk-api-kotlin-gen/build.gradle.kts
+++ b/sdk-api-kotlin-gen/build.gradle.kts
@@ -1,6 +1,7 @@
 plugins {
   java
   kotlin("jvm")
+  kotlin("plugin.serialization")
   `library-publishing-conventions`
   alias(kotlinLibs.plugins.ksp)
 }
@@ -22,6 +23,7 @@ dependencies {
   testImplementation(coreLibs.protobuf.java)
   testImplementation(coreLibs.log4j.core)
   testImplementation(kotlinLibs.kotlinx.coroutines)
+  testImplementation(kotlinLibs.kotlinx.serialization.core)
 
   // Import test suites from sdk-core
   testImplementation(project(":sdk-core", "testArchive"))
diff --git a/sdk-api-kotlin-gen/src/main/kotlin/dev/restate/sdk/kotlin/gen/KElementConverter.kt b/sdk-api-kotlin-gen/src/main/kotlin/dev/restate/sdk/kotlin/gen/KElementConverter.kt
index 411c3f0b..22b18688 100644
--- a/sdk-api-kotlin-gen/src/main/kotlin/dev/restate/sdk/kotlin/gen/KElementConverter.kt
+++ b/sdk-api-kotlin-gen/src/main/kotlin/dev/restate/sdk/kotlin/gen/KElementConverter.kt
@@ -231,8 +231,13 @@ class KElementConverter(
     if (rawAnnotation != null && ty != byteArrayType) {
       logger.error("A parameter annotated with @Raw MUST be of type byte[], was $ty", relatedNode)
     }
+    if (ty.isFunctionType || ty.isSuspendFunctionType) {
+      logger.error("Cannot use fun as parameter or return type", relatedNode)
+    }
 
-    var serdeDecl: String = if (rawAnnotation != null) RAW_SERDE else jsonSerdeDecl(ty)
+    val qualifiedTypeName = qualifiedTypeName(ty)
+    var serdeDecl: String =
+        if (rawAnnotation != null) RAW_SERDE else jsonSerdeDecl(ty, qualifiedTypeName)
     if (rawAnnotation != null &&
         rawAnnotation.contentType != getAnnotationDefaultValue(Raw::class.java, "contentType")) {
       serdeDecl = contentTypeDecoratedSerdeDecl(serdeDecl, rawAnnotation.contentType)
@@ -242,7 +247,7 @@ class KElementConverter(
       serdeDecl = contentTypeDecoratedSerdeDecl(serdeDecl, jsonAnnotation.contentType)
     }
 
-    return PayloadType(false, ty.toString(), boxedType(ty), serdeDecl)
+    return PayloadType(false, qualifiedTypeName, boxedType(ty, qualifiedTypeName), serdeDecl)
   }
 
   private fun contentTypeDecoratedSerdeDecl(serdeDecl: String, contentType: String): String {
@@ -311,17 +316,40 @@ class KElementConverter(
     }
   }
 
-  private fun jsonSerdeDecl(ty: KSType): String {
+  private fun jsonSerdeDecl(ty: KSType, qualifiedTypeName: String): String {
     return when (ty) {
       builtIns.unitType -> "dev.restate.sdk.kotlin.KtSerdes.UNIT"
-      else -> "dev.restate.sdk.kotlin.KtSerdes.json<${boxedType(ty)}>()"
+      else -> "dev.restate.sdk.kotlin.KtSerdes.json<${boxedType(ty, qualifiedTypeName)}>()"
     }
   }
 
-  private fun boxedType(ty: KSType): String {
+  private fun boxedType(ty: KSType, qualifiedTypeName: String): String {
     return when (ty) {
       builtIns.unitType -> "Unit"
-      else -> ty.toString()
+      else -> qualifiedTypeName
+    }
+  }
+
+  private fun qualifiedTypeName(ksType: KSType): String {
+    var typeName = ksType.declaration.qualifiedName?.asString() ?: ksType.toString()
+
+    if (ksType.arguments.isNotEmpty()) {
+      typeName =
+          "$typeName<${
+                ksType.arguments.joinToString(separator = ", ") {
+                    if (it.variance == Variance.STAR) {
+                        it.variance.label
+                    } else {
+                        "${it.variance.label} ${qualifiedTypeName(it.type!!.resolve())}"
+                    }
+                }
+            }>"
     }
+
+    if (ksType.isMarkedNullable) {
+      typeName = "$typeName?"
+    }
+
+    return typeName
   }
 }
diff --git a/sdk-api-kotlin-gen/src/test/kotlin/dev/restate/sdk/kotlin/CodegenTest.kt b/sdk-api-kotlin-gen/src/test/kotlin/dev/restate/sdk/kotlin/CodegenTest.kt
index 4ad5dc89..82dea76a 100644
--- a/sdk-api-kotlin-gen/src/test/kotlin/dev/restate/sdk/kotlin/CodegenTest.kt
+++ b/sdk-api-kotlin-gen/src/test/kotlin/dev/restate/sdk/kotlin/CodegenTest.kt
@@ -18,6 +18,7 @@ import dev.restate.sdk.core.TestDefinitions.TestDefinition
 import dev.restate.sdk.core.TestDefinitions.testInvocation
 import dev.restate.sdk.core.TestSerdes
 import java.util.stream.Stream
+import kotlinx.serialization.Serializable
 
 class CodegenTest : TestDefinitions.TestSuite {
   @Service
@@ -42,6 +43,26 @@ class CodegenTest : TestDefinitions.TestSuite {
     }
   }
 
+  @VirtualObject
+  class NestedDataClass {
+    @Serializable data class Input(val a: String)
+
+    @Serializable data class Output(val a: String)
+
+    @Exclusive
+    suspend fun greet(context: ObjectContext, request: Input): Output {
+      return Output(request.a)
+    }
+
+    @Exclusive
+    suspend fun complexType(
+        context: ObjectContext,
+        request: Map<Output, List<out Input>>
+    ): Map<Input, List<out Output>> {
+      return mapOf()
+    }
+  }
+
   @VirtualObject
   interface GreeterInterface {
     @Exclusive suspend fun greet(context: ObjectContext, request: String): String
@@ -194,6 +215,13 @@ class CodegenTest : TestDefinitions.TestSuite {
             .withInput(startMessage(1, "slinkydeveloper"), inputMessage("Francesco"))
             .onlyUnbuffered()
             .expectingOutput(outputMessage("Francesco"), END_MESSAGE),
+        testInvocation({ NestedDataClass() }, "greet")
+            .withInput(
+                startMessage(1, "slinkydeveloper"),
+                inputMessage(KtSerdes.json(), NestedDataClass.Input("123")))
+            .onlyUnbuffered()
+            .expectingOutput(
+                outputMessage(KtSerdes.json(), NestedDataClass.Output("123")), END_MESSAGE),
         testInvocation({ ObjectGreeterImplementedFromInterface() }, "greet")
             .withInput(startMessage(1, "slinkydeveloper"), inputMessage("Francesco"))
             .onlyUnbuffered()