How do I create this style border?

use the rectangle marquee tool to make a selection (assuming you are working with a flat file). then duplicate that layer, add a stroke (to the inside to keep the corners sharp) then add a drop shadow. now with the original background layer, double click it to make an editable layer and drop the opacity down to 20-30%. OPTIONAL: add a new layer and move it to the back and fill with white.

hope that helps....
 

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