Xiao Jianhua was last seen at a luxury hotel in the city on Friday. His disappearance was reported to Hong Kong police on Saturday, but the case was withdrawn the following day.
The South China Morning Post said a source close to the billionaire had confirmed he was now in mainland China, and had been able to communicate to his family that he was safe.
The businessman, whose wealth is estimated at $6bn, was reportedly normally protected by a contingent of all-female bodyguards but, according to the Financial Times, he was seen being escorted from his hotel room by mainland police on Friday without a struggle.
The newspaper said the Four Seasons Hotel, where Mr Xiao had been living, had provided CCTV footage of the incident to Hong Kong’s police, which is meant to have sole responsibility for policing the territory.
Mainland police are barred from operating in Hong Kong under what is known as the “one country, two systems” rule which is supposed to guarantee legal rights in the former British colony for 50 years from its handover in 1997.
Mr Xiao was born in China, but holds Canadian citizenship, as well as a diplomatic passport from Antigua.
He founded the Tomorrow Group, a financial services firm, which reportedly enjoys connections to the families of high-ranking Chinese officials.
A posting under Mr Xiao’s name on the company’s social media account had earlier denied reports of his abduction and said he was abroad receiving medical treatment, but the message has since been deleted.
The case will raise concerns about the protection of rights in Hong Kong, with parallels already being drawn with the disappearance of five booksellers in late 2015.
The five men, whose bookshop had published works critical of China’s leadership, later reappeared in police custody on the Chinese mainland.
They included British citizen Lee Bo and Gui Minhai, a Swedish citizen, who went missing from Hong Kong and Thailand respectively, raising fears of extraterritorial operations by Chinese mainland security agents.
There has been no comment so far from the Ministry of Public Security in Beijing, which is currently closed for the Chinese New Year holiday.