He cannot enter controlled airspace here. I had the same issue, now if the right hand seat person would be PIC for the IFR flight, and on the flight plan then yes he can fly.
how they log that is up to them, the left seater can log all the time if he is sole manipulator, he sould also be under the hood, so the right seater has to be pilot in command/safety pilot.
Oh and yes both can log PIC in there book (weird on this but is allowed), Question for you, how will anyone know if the other person is qualifed or not?