Abstract Micro, Small and Medium Enterprises (MSMEs) are one of the cornerstones supporting national economic developing. The tourism service enterprise has become an actual issue in Indonesia in national economic development, especially in certain areas that place tourism as a source of people's economic dynamics, especially Bali. The comprehensive idea that emerged was to make local MSMEs in tourism areas, especially Bali, have strong competitiveness in facing various obstacles in their development. This issue leads to the nature of local MSMEs in their existence in Bali, which is actually a cultural-based tourism destination. Local MSMEs confront variety resistance in their progression and developing and are related to the underlying legal basis so that it is necessary to solidify the competitiveness of local MSMEs in Bali. This research uses normative legal research methods. The approach application in this studies the statute approach and the conceptual approach. The legal substances application in this studies are primary legal materials and secondary legal substances. The techniques application in accumulate legal substances in this research is document study by taking an inventory of existing legal materials. The results show that the competitiveness of local SMEs is determined by a conducive internal and external environment. The internal environmental includes facets of the grade of human resource, mastering of technology and information, organizational structure, management system, enterprise culture/culture, financier force, enterprise network with external side, and rate of entrepreneurship. Meanwhile, the externally environmental is relevant to existing authorities’ policies, legal facets, market competitive circumstance, economic-social-social circumstance, infrastructure circumstance, public education rate, and changes/growth of the global economy. In additional, the inability of MSMEs to compete is caused by several factors, including capital, the incapacity to enhance the quality of both the quality of human resources, management quality, and product quality, quality use of technology, market access to information seeking and the absence of new innovations from MSMEs themselves.