An Australian man has been shot dead and another seriously injured in a suspected gangland-style attack at a villa in Bali, with three suspects now facing the death penalty.

Zivan 'Stipe' Radmanovic, 35, and Sanar Ghanim, 34, were shot just after midnight on Saturday at a villa in Munggu - in Badung Regency in Bali's south - in an attack believed to be linked to Melbourne's feuding Middle Eastern crime syndicates.

Mr Radmanovic died in front of his wife at the scene, while Mr Ghanim was rushed to BIMC Hospital with multiple injuries.

He was discharged from hospital on Sunday, using a wheelchair and nursing a bandaged leg, and has refused to co-operate with local authorities.

Mr Ghanim is also the former partner of Danielle Stephens, daughter of notorious Australian drug trafficker Carl Williams, with the connection sparking speculation that the shooting was a targeted hit.