Ubuntu Servers :: Have SSH Running / But Create A New Login With Limited Access

I have SSH running on a computer I use as a server at home and login to it for my own purposes but am needing to share access to this server with someone else, and I'd like to do it in a way so that when they sign in all they see is the contents of one folder and nothing outside of it. So I'd like them to have full access to this folder and do anything they want with it, but not be able to browse outside of it at all via something like WinSCP (they're using Windows). I'm thinking I need to create a new account for them to sign in with but beyond that I'm not sure what I need to do. The only other special thing is that the folder I'd like them to be presented with is actually on an external hard drive. We're going to be doing a lot of online music collaboration and I need to give him lots of free space to drop files and the internal hard drive doesn't have a lot to spare right now.