After you have set permissions for a library, you may want to set unique permissions on one or more folders in that library. For example, you may want to create a subfolder where anyone could read and add files to a subfolder, but not the root folder or any other subfolder.
Note: This procedure is for SharePoint Server 2013 or SharePoint Server 2016. If you're using SharePoint in Microsoft 365, see Share SharePoint files or folders.
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For important pre-requisite knowledge about library permissions, see Edit permissions for a list, library, or individual item.
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In SharePoint Online, you can invite external users to your sites. However the following procedure only works for internal users. As an alternative for external users, you can create a separate, dedicated library to provide unique permissions.
Procedure
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Navigate to the site and library for which you want to create unique permissions on a subfolder.
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If necessary, create the subfolder and add a few files.
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On the subfolder name, do the following:
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Next to the subfolder name, click the Ellipsis…
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On the file popup window, click Share.
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On the Share dialog box, click Shared with, and then click Advanced
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To remove permission inheritance for the folder, click Stop Inheriting Permissions.
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For existing users, edit the permissions of those in the current list by selecting the check boxes and clicking either Edit User Permissions or Remove User Permissions.
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For new users, click Grant Permissions and fill out the dialog box. Make sure you click Show options and select the appropriate permission level.